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I will say when a a a bit a spot Bitcoin ETF is approved because I think the probability is well we think it's 95% now if not higher wow I do think the macro environment is going to be good a good good not for all technology including including uh blockchain technology so and and and and crypto assets so yes we're we're very optimistic as I said nothing goes straight up and you'll have funds playing the you know the big surges and but truth wins out and we think the move into this new asset class will be inexorable uh so pretty excited about that Kathy Wood the CEO and founder of Ark invest asserts a strong 95% probability of a crypto explosion in 2024 this heightened certainty is linked to her belief that a spot Bitcoin ETF will gain approval by January 10th a significant deadline for the SEC to make a decision what setswood perspective apart is not just the involvement of Industry heavyweights like Black Rock and Fidelity in Bitcoin ETF applications but also the active participation of Ark invest in her latest interview Cathy delves into the details of the Bitcoin ETF landscape providing valuable insights into her outlook for crypto in the upcoming year Wood's unique position within the industry places her in a prime position to assess the likelihood of approval given Arc invests active involvement in the Bitcoin ETF application process her breakdown of the situation offers viewers a comprehensive understanding of the dynamic at play in this pivotal moment for crypto Additionally the video concludes with Cathy wood elaborating on why the macroeconomic environment is ideally poised for crypto success in 2024 and her anticipation of deflation providing viewers with a holistic view of her insights and expectations for the crypto landscape I will say when a a a bit a spot Bitcoin ETF is approved because I think the probability is well we think it's 95% now if not higher wow specifically in January early January window or just we think it's very high ailia you might have a lower odds here I don't know but but all the signals are it could still you know there could be still some details which uh you know which would force the secc our our Arc 21 shares deadline January I mean yeah January 10th is the forcing function here and is there a scenario where the SEC would come to all of us in in line and say okay we've just discovered this we didn't know about it uh we would like you to uh or we would like to push all these decisions back up to them I don't know but so far so good I don't think I I know the that the cash versus in kind create and redeem uh is an issue here but um um and we can talk about that later but uh I think a couple of things happened especially something 5 years ago in 2018 uh Cambridge Associates which is a consultant two institutions endowments foundations and so forth wrote a paper about Bitcoin and said to the institutional World okay you may agree with all of these leaders who are calling it a Ponzi scheme or an environmental Scourge on on the system uh but uh recognize that the correlation uh of risk and return uh uh between Bitcoin and all of these other assets is very low so what we probably have here is a new asset class and what institutions do know is that the best way to increase returns per unit of risk is to diversify into a new asset class so this is very important and so uh Cambridge back then said said you may not like it and you may really believe all these people are saying these horrible things about it but this is the way it's behaving and our study and we've put this study out we're updating it now on what should be the institutional allocation in a broad-based portfolio to bitcoin if you want to this is as of last year we're about to publish uh new numbers but as of last year if you wanted to minimize V volatility the optimal uh weight of Bitcoin in your overall portfolio would be 2% if you want to maximize your sharp ratio so your return per unit of risk uh then the number is closer to 6% and this kind of makes sense because I remember other new asset classes real estate very early in my career so 70s and 80s real estate was the new asset class and institutions started with a 1% allocation and then gradually moved up to that 5ish per maybe above and then Emerging Markets when that became a category because it wasn't one Emerging Market at a time but it was a category a new category again started with one and moved up to 5% that we believe is what is going to happen here and I think the fact that we and others are educating institutions that wait a minute this is mathematically metered to go up to 21 million units and we're at roughly 19.5 million uh the scarcity value uh is already showing itself and with institutions starting to push in that will be ever more true so can might we get a sell on the news well sure we've had a nice little burst here and there's just the hedge funds trade on anything on any news so you could have a a bit of a selloff but we think that uh the institutional demand is going to take this uh this new asset class much higher in terms of uh in terms of market value yes and if you look at uh the performance of Bitcoin over o over rolling three five seven year uh periods it is the top performing asset and over all those uh periods since its Inception it's the top performing asset out there so uh institutions cannot dismiss it uh un unless unless they think there's some they they know something that nobody else knows and I doubt they do about the underlying technology you know even the the risk of a of a hack um you know teaching them about okay this the the base layer hacks have been di Minimus feel you correct it's the layer ones uh you know it's the the ba it's not the base layer it's the layers on top that have been hacked effectively and once they understand that they have to step back and reassess it because you know base uh layer Bitcoin is where they will have the exposure right in Cold Storage uh it depends on who which the which issuer but in our case at coinbase they have have to have been looking at this I mean we've certainly been putting the research out but they needed the regulatory seal of approval and that will be the SEC uh approval of a Spock Bitcoin ETF because the if it's good enough for the retail investor again the SEC is really thinking about the retail investor if it's safe enough for them then institutions certainly uh should not dismiss it as a a new asset class I think the Seal of a approval from the SEC especially given how vociferously the SEC who has said you know I think uh incorrect had made has made incorrect observations you know we know the people at in the research department at the SEC the crypto research department they are very good they know what they're talking about and uh I think some of what we've uh witnessed out there has been much more political in nature than grounded in fact but it has confused and OB fiscated and institutions do not want to get in the way of that kind of uh dog fight right uh now they've got more the judicial system on their side okay check check you know legislative uh side is starting to move in the right direction so these are all sources of confidence I think for the Institutional Investor which is a very con conservative investor we have uh grown up in a world and that has gone very Benchmark sensitive you know they don't want to put anything in their portfolios that isn't in a benchmark I founded Arc for for that reason because there are so many exciting companies and opportunities out there that aren't in benchmarks and certainly Bitcoin isn't uh so this is uh this again is one of the reasons uh I found it Arc but we needed the the check the checks of the checks and balances for institutions to really say okay it's safe now I think that uh again just having gotten to know some of the researchers at the SEC over time um I've been impressed that they really do want to learn from us and uh you know I I also was impressed uh so Michael sailor I remember in the early days as when he was putting uh Bitcoin on his balance sheet and uh you know I just chatted with him and said hey have you have you talked to the SEC you really should because you do not want to be shut down in your current form and become an investment company and uh he did and they they uh directed him to fby and he did a very good thing for for Bitcoin in terms of now it is not considered an intangible asset and there will be Mark to Market so much healthier treatment so you know I think uh I think they've been um I think they've been forthcoming in their interest in understanding both Bitcoin and ether uh and pretty intensive in in their study of it so I I I will uh ailia is the odds maker on this one but uh I would agree with her there's it's probably a Go in 21 24 I I think there are too many um indicators out there not the least of which is the yield curve which has been inverted meaning uh long rates are lower than short rates for longer than at any other time in history and any other time this has happened We've Ended up in a recession and they are beginning to hear from industrial America in particular things are not good and China's exporting deflation to the United States so U Sheen and everything which is uh which is of course hurting retail profit margins as well so companies are losing pricing power uh the FED wanted inflation at 2% they're going to see negative inflation and I think that's why they're changing their tune they're going to see negative inflation in 2024 I believe for the CPI if you technologically enabled in Innovation is deflationary it's very comfortable in that world uh what is not comfortable are uh companies and industries that have gotten used to pricing power and if you look at some of the crazy price increases that Staples companies especially Staples uh and some health care companies uh they got used to those and now they're going to have to drop all those prices and they have not adjusted their cost structures there's going to be a lot of pain in terms of profit declines in a declining price environment but not for tech companies this is their comfort Zone because technology follows learning curves which are characterized by cost declines which are passed through into price declin so it's a very natural environment and that's a good deflation it causes booms in unit growth the bad deflation will happen to those companies that haven't invested enough in Innovation or have been fighting Innovation or have been catering to short-term uh oriented shareholders who want their profits now and their dividends now and their share repurchases instead of investing in Innovation they have they're going to have obsolete products and they will have to cut those prices in order to clear the shelves how about how about for crypto Kathy what do you have any predictions for 2024 so so it feels like we are in the early stages of a bull market right with Bitcoin uh above 40K and we've got the ETF on the horizon we've got some other things do you think 2024 is going to be and maybe the F the FED pivot as you said do you think 2024 is going to be a good year for crypto assets I do think the macro environment is going to be good a good good not for all technology including including uh blockchain technology so and and and and crypto assets so yes we're we're very optimistic as I said nothing goes straight up and you'll have hedge funds playing the you know the big surges and but truth wins out and we think the move into this new asset class will be inexorable uh so pretty excited about that Kathy Wood's confidence at regarding the potential approval of a spot Bitcoin ETF by the SEC is seen as a pivotal moment for the crypto industry in 2024 such approval could serve as a catalyst for mainstream adoption and institutional investment potentially fueling substantial growth in the crypto Market Cathy's insights into macroeconomic factors supporting crypto in 2024 particularly her anticipation of deflation provide a contrarian perspective on how economic Trends might shape the crypto space her expertise coupled with the participation of major players such as Black Rock and Fidelity underscores the gravity and potential of this development if you found this video informative and wish to stay updated on the latest in finance and crypto consider subscribing for more updates for more daily dose crypto news check out these two awesome videos on your screen click now and we will see you on the next video
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