• Cathie Wood: The Crypto Market is in a “Period of Explosive Innovation”

  • Cathie Wood, the founder, CEO, and CIO of Ark Capital (a global asset investment group), has refuted claims made by skeptics such as John Paulson that the cryptocurrency market is only a short-term gamble and a bubble that will inevitably burst.

    When host Brian Sozzi asked Cathie Wood about skepticism from people like Paulson, she said, “Many people ask me: are we in a bubble? We couldn’t be further from it,” she said, adding that “I don’t believe that investors, the average investor, understands how provocative the next five to fifteen years are going to be.”

    The intriguing nature of this not-too-distant future to which Wood refers is the rate at which the crypto and blockchain sectors are growing in terms of innovation and industry, citing Coinbase as an example of innovation within the space. She also mentioned Robinhood as a traditional industry player that has successfully shifted to cryptocurrency.

    Cathie Wood has debunked John Paulson’s “crypto bubble” theory.

    Cathie Wood’s comments follow an earlier interview with prominent investor and short-seller John Paulson, conducted on September 1 by Bloomberg Wealth’s David Rubenstein. In the interview, Paulson discussed what he considers to be a lack of viability in the crypto market.

    According to Paulson, the cryptocurrency market is a “bubble” with “a limited supply of nothing” because crypto has “no intrinsic value,” and he “wouldn’t recommend anyone invest in cryptocurrencies.” In addition to these remarks, Paulson slammed the crypto investment market even further, claiming that it has “unlimited downsides” and is “too volatile to short,” comparing crypto investments to a “get-rich-quick scheme.”

    John Paulson is a multibillionaire hedge fund manager who co-founded the New York-based investment management firm Paulson & Co in 1994. Paulson is best known as the subject of the critically acclaimed book ‘The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History,’ which details how Paulson made over $15 billion in 2006 by betting heavily against the housing bubble and winning.

    His remarks reflect what Cathie Wood refers to as an overly risk-averse, “benchmark sensitive” baby boomer generation of investors who rely excessively on statistical data provided by indices such as the NASDAQ as a result of having lived through several significant bubbles, including the dotcom bubble and the 2008-2009 meltdown.

    According to Wood, the issue here is that those who rely solely on these indices to inform their investment decisions are missing out on key emerging and innovative markets, such as blockchain and cryptocurrency, that such indices simply do not cover.

    “Wait a minute. Indices do not capture a lot of innovation that is all about the future. In fact, we believe that the indices capture very little of it,” and she adds, “We are in a period of explosive innovation… We have never seen in history five major innovation platforms involving 14 different technologies all moving into s-curves… as these s-curves feed into each other, [they will] enter exponential growth trajectories that we have never seen before.”

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