Institutions Are All-In On Bitcoin | Cathie Wood

I think it is beginning to turn heads if you look at the three-year moving average Bitcoin has gone up every year and I think it's just becoming undeniable that it is a force that that especially now that institutions have to consider it we showed the correlations of returns the correlation with other assets still very low it's absolutely essential that in institutional asset allocators uh take a look at this asset thank you Anthony hello everyone 2014 I think it was yes you put Bitcoin into your uh portfolio well 2014 was our first blog 2015 was our first white paper and um we put uh we G gave our clients exposure to bitcoin GB TC at the time the only thing we could use uh in 2015 uh between $200 and $250 all right oh by the way we faced so much resistance that's what I was going to ask you about explain what the reaction was no from everyone including we had to ask permission uh we had to ask the New York Stock Exchange permission to put it in I don't know all the rules and rs but they said okay yes but only 1% % of the portfolio but they didn't tell us that we had to sell it if it went higher so we just never sold it until the until uh the end of 2017 where other regulations and the push back from traditional Financial Service really hit we were scaling our business uh meaning our our ETF business which is all around uh all kinds of disruptive innovation and so boom but we were not getting on platforms uh like Merill Morgan Stanley and others because our Flagship had Bitcoin in it and so we then decided okay we're going to keep it in next Generation internet but Flagship right at the top $20,000 better better lucky than smart you every year put out a big Ideas uh list and it's all the things that you guys think are going to be important for the next year but also you highlight a lot of Innovative Technologies and I think why you are so loved is because you're constantly thinking about where the world is going and which Technologies are going to play a big part there Bitcoin has been one of those Technologies for a long time uh but it is not operating in a vacuum we now are seeing things like artificial intelligence and uh humanoid robots even self-driving cars and it feels like when I read the big ideas and listen to you talk these things are all coming together and so talk a little bit as to how you see bitcoin's role in maybe the broader Innovative technology bucket and how these things will all kind of work in unison as we kind of build the future yes uh um one other push back we got just to say when we first put it in we were kind of new to the business and the most famous ETF publication of the time made fun of us saying yeah great marketing gimmick and my answer to that was great they have no idea what this is they have no idea anyway yes uh so we just put out earlier this month something called Big Ideas 2025 and um we've become fascinated with the convergences among all of the Technologies uh around which we have centered our research so we've centered our research around the five major Innovation platforms evolving today so as you said Anthony uh robotics energy storage artificial intelligence blockchain technology and uh multiomic sequencing in the life science space AI if you look at the convergence chart in that deck um and compare it to the one we put in last year what you see are uh the the convergences are intensifying uh with AI uh really the heartbeat of convergence pushing everything everything along and accelerating the pace of change and also accelerating the deflationary undercurrents and I know this is very controversial but uh accelerating the the deflationary undercurrents that we believe are going to intensify deflation not bad deflation good deflation when you cut prices you enable more access right um so if you look at the conver Ence chart uh you know we've uh focused of course on blockchain Technologies and an agentic AI and I I'm I'm I'm sure people have talked about this today no no oh okay teach us Kathy all right um does anyone have you heard of a gentic AI yes yes so um I wish when I started Ark I wish I had an agent who I could just say I want to start this company tell me what I need to do legally uh operationally uh marketing wise and you just you know you can do that today and of course Dows I mean back in 2016 we heard uh uh distributed autonomous organizations you know people were saying that's crazy and we were were saying no oh there's something's going to happen that's going to enable this new world and so the world we're moving into let's say I start up my business and you know my agents that I put on each of these tasks you know has to H has to facilitate payment you know from one to the other and however we structure the organization it can't be done with Fiat now the way we're set up it it probably only can be done with blockchain technology and crypto assets of various types and I know we have a lot of Bitcoin Maxis here and we're as Maxi as they come in terms of where we think the ultimate value will reside in the entire ecosystem but in terms of facilitating both personal agents I hate shopping I hate shopping I just want someone to dress me and you know tell me what I look good in or somebody else tell me I and just have it happen we're moving into that kind of world and as we uh enable our agents to do more and more giving them more information and freedom to do so um we're going to need uh we're going to need peer-to-peer transactions a API to API uh uh payments in order to follow through on some of these autonomous organizations when I hear you talk what I think about is Bitcoin is becoming this hurdle rate it's becoming this uh kind of Benchmark where you're talking it's the ultimate you know place where value will reside um how do you think about Bitcoin from a portfolio standpoint if it continues to compound at 60% year after year after year after year is every Wall Street investor just eventually have to throw their hands up and say I can't beat this thing I I got I gotta buy it like like how does that play into uh an investment community that you know billions of dollars is spent on salaries and offices and research and all this stuff and Bitcoin just continues to outperform them so again in in uh Big Ed is 2025 I guess I'm promoting that quite a bit but there is a page where we're talking to traditional uh financial services and I don't know if you're referencing this but we list the assets and their compound annual rate of return over the last five years all of them all of the major assets and we put in there the sharp and sortino ra ratio so if you're not if you don't do quantitative analysis modern portfolio Theory all of that um you're probably not going to care about that but they do and um and uh I think it is beginning to turn heads uh because you know if you look at the I think it is it's not even the four-year moving average which would capture the cycle but the three-year moving average Bitcoin has gone up every year if you're using a a a threeyear moving average and I think it's just becoming undeniable that it is a force that that especially now that Institution have to consider it as a new asset class because we've also put out there actually put it out in 2016 Bitcoin ringing the bell for a new asset class we showed the correlations of returns the correlation still even though traditional investors are getting involved the correlation uh correlations with other assets still very low it's absolutely essential that institutional asset allocators uh take a look at this asset if they don't they're not doing their fiduciary uh responsibility so we're trying to we're trying to help ease them provide a bridge okay we're talking your language uh Bitcoin is not only a a technology uh it's not only one of the biggest ideas ever uh you know the global monetary uh system rules-based digital private all of that but it is a new asset class and when you present investors with those three and and and they're not knowledgeable enough um it's a little bit threatening or they feel a bit vulnerable so we are trying to bridge in with okay we're going to talk your language uh you need to look at this new asset class it's not operating in a vacuum there is a Global macro World there is trade Wars we saw today uh zinski did see and Trump I don't know if anyone has seen yet uh but uh president Trump and vice president uh Vance essentially you know called zinsky into the principal's office and front of the media told him knock it off took him to the Woodshed that's a good Reagan expression took him to the Woodshed in front of all the world to see and so as that's happening let's just say that there's maybe two major themes there is um the global macro World which is global liquidity and interest rate and policy decisions and all that overlaid with uncertainty maybe is the best way to do it right and I think that there's a lot of people blaming the recent price action on bitcoin and all that on some of that uncertainty but how do you see bitcoin's future if we have a world where doge is cutting government spending if we have a world where these trade Wars are playing out like like how does your analysis of Bitcoin change you definitely got to come to mining disrup the largest mining Focus conference pretty dang [Music] awesome it's a great opportunity for the people let's go out and make some money with it get engaged defend the [Music] industry today's episode is brought to you by Gemini the future is being built today and the future of currency isn't dollars Euros pounds or Yen it's crypto and Gemini thinks that's a great thing because a future where money is decentralized inclusive and globally accessible that's a future that we are anxious to be a part of Gemini teamed up with futurist technologists and designers like award-winning artist Matt Griffin known for his illustrations for Dune to craft a vision of the future with crypto at its core the creative theme go where dollars won't emphasizes EXP exporation growth and the crypto Market's Limitless potential whether it's going on that Martian Safari to capture an unforgettable photo of a herd of woolly mammoths grazing the red planet or using Bitcoin to pay for your lift pass to go strata of skiing down the mountain peak of a breathtaking Comet whatever Adventures will be living one thing is for sure in a future this fantastic the limits of traditional currency simply cannot keep up Financial Innovation will usher in this new frontier and so go where dollars won't with Gemini go check them out at gemini. com slgo where dollars won't again go check it out at gemini. com go where dollars won't and if we have World which we believe we've entered where five major Innovation platforms involving 14 15 15 uh um uh Technologies are converging and disrupting the entire traditional World Order well where what in that world now I'm very confident in in our research and in our projections but if I'm someone who doesn't do what I do all day long um and I'm studying all the ways to hedge against you know all the uncertainties out there ground shifting underneath us technologically geopolitically um uh what is the one thing I am certain about I am certain about 21 million units I I am certain about that and there have been you know for those of you I don't know um if we have an economics oriented uh audience here but uh art laugher uh actually helped us write that first uh white paper on on bitcoin and um and he said after he agreed to collaborate us and with us and he said you know this is what I have been waiting for since the US closed the gold window in 1971 he's been waiting he's 85 now I think this has rejuvenated him uh and he's prizing to the rest of the world El Salvador Surinam he was in Argentina uh and he's beginning he's beginning to help them understand how important this source of certainty will be to them and you know one of the biggest things that has surprised us um when we were brainstorming about Bitcoin in the early days of arkc uh our working assumption was that the early um government adopters of Bitcoin would be in the Emerging Markets because they live in such a chaotic world that is you know they are battered every now and then by the dollars appreciation and which you know they've got a lot of dollar denominated debt uh they run their company their their countries on their own currency and they're losing out constantly so I've been very surprised that the US really I mean yes El Salvador was you know was there but the US is is leading the charge here and I think it's going to serve us very well over time I want to talk about the economy moving forward over the next year two years three years uh because I think that's going to have a very big impact on bitcoin um let's start with Doge they say they're slashing cost every day they're tweeting some ridiculous use of taxpayer money uh what is your confidence level in their ability to be successful but also how do you think that affects financial markets you know so much of asset prices going up has been that the government is incredibly bad at their job and they waste a lot of money so we devalue the dollar and asset prices go up but if doge is successful does that actually hurt asset prices um oh no no no no no I actually think this is um you know I started in the business well I was in college in the late 70s but really here in New York in the early 80s and it was the Reagan Revolution and he was going he was changing I mean the 70s were just a horrible decade and uh so there was a similar kind of an election and a willingness to change um and you know I've I've SPO I think we're well known for our Tesla work research and and our Tesla position so in you know I I don't speak to Elon that much but when we talked about this topic I said government spending is taxation government spending that's how you sell this that surface everything that you find out there because you know we haven't done that we haven't cleaned house in so long and uh I think think you know Elon is Relentless and uh he's got a boss who's also Relentless so I do think it's going to be successful I I think it's going to drive huge increases in productivity as well um So Reagan Revolution I think I think this Revolution Will dwarf the Reagan Revolution but I grew up in the the the Heyday of active Asset Management now everybody kind of is passive or Benchmark sensitive those were the glory years and I think we're going back to the glory years I think uh deregulation I think uh on monetary policy uh I I do believe that one of the reasons Trump has become uh such a fan is you know it's good competition for the dollar and he wants that he wants wants you know uh monetary policy to be influenced by it I don't think he wants the dollar to go away and I don't think it will um but uh I think I think we're going to have you know Bitcoin and the dollar as the two sort of Reserve currencies out there you recently were talking publicly about tax policy and the velocity of money and that sounds for some people they may say oh tax policy that sounds so boring but as a tremendous impact because of the velocity of money on their portfolio so talk a little bit about your ideas of how these two things are related yeah I've started you know I sometimes um get to thinking about something and if I'm not hearing about it in the press and I'll just start posting on X and so yes this has been my latest um so the velocity of money is the rate at which money turns over now in a an an environment of fear which is what we have right now in an environment of fear what do people do well you've got I'm going to say 30% of the labor force which is in either government or quas government including Health Care education and so forth 30% or more of the labor force is saying am I going to have a job how's this going to filter down to the state local sector that's where the bulk of the jobs are so so there's fear and that's so that will slow the velocity of money down so it hit me when Walmart would came out and said 2025 is going to be a big slowdown last year they had 5% same store sales now they're saying it's going to be 3 to 4% so that's a 30% deceleration in the growth rate so that's a change in a change so um that's for them to be so sure now they're seeing something they do not like so part of it is fear but there's another reason uh people will delay purchases or business activity if they think their their uh tax rates are going down and again less them from the early Reagan years if they think their tax rates are going down they're going to wait and hold off on a a lot of activity until they understand what that means and if you listen to Kevin hasser recently he's been talking about the quid pro quo between tariffs and taxes what that means to me given that art has uh been an adviser to every president with the exception of two in the last I'm going to say 30 40 50 years um is that we're moving towards a flatter tax system and lower rates for everyone that's Reagan Revolution Reagan delayed the impact the full 25 percentage Point reduction took three years the economy fell into two recessions why well there were a lot of other reasons but we learned very quickly in in uh um 1983 oh my gosh we went into a boom they were all waiting for that last time so you've got fear of unemployment you've got wait how much of a better deal am I going to get out there um and the same thing with pricing if people think prices are coming down and interest rates are coming down as president Trump is and is uh uh telling us and and long rates have started coming down nobody believed that was going to happen they're going to hold off for the lower rates lower prices so those are three delays now what does this mean today we got Atlanta's GDP now estimate is negative for the first quarter negative GDP now we have been saying uh you know and and many people didn't agree with this point of view but I think it's playing out now we've been in a rolling recession since the FED started raising rates in 22 it jacked them up at a record-breaking Pace we've never had anything like that you go back to vulker everybody remembers 20% interest rates yeah went from 10 to 20% that's a two-fold increase we went up 24-fold in a little more than a year's time that was a major shock to the system and I think we have been one sector after another moving to the one that did not capitulate was the consumer and it did not capitulate because of the high-end consumer well guess what in the last University of Michigan uh consumer sentiment survey the high uh High income earners confidence cracked so I think we're going to see a completely different tune in the next few months what you're basically arguing for is as tariff Revenue goes up Trump will bring down the tax rate which he did do in 2018 right he started to implement tariffs he dropped us from 39.

6 to 37% in the federal income tax but are you making an argument that he should drop the tax rate earlier or that he should drag it out over time today's episode is brought to you by zapo picture this every time you trade Bitcoin the spread determines how much value stays with you that's why securing top tier Bitcoin trading fees is key to Growing your Bitcoin wealth but what if I told you that there's a platform that lets you save up to 90% on your Bitcoin trading fees now here's the kicker not only do they save that money they also are dubbed the fort KNX of Bitcoin zapo Bank they're the world's first fully licensed and regulated Bitcoin and banking group and they have been delivering a unique blend of physical and digital security for over a decade from military grade Swiss bunkers to Cutting Edge digital protocols they've got you covered and now they're bringing you the kind of competitive Bitcoin trading fees typically reserved for institutional Giants right in the palm of your hand with zapo banks ultra competitive spreads more of your Bitcoin stays where it belongs in your pocket ET whether you're trading big or small every move you make is designed to boost your gains and fuel your financial future head to zapo bank. com pomp to join that's XA p o b n k.