Did you know Cathie Wood is a Christian capitalist? That's why her popular investment funds are called ARK.
Who knew.
Wood skyrocketed into the spotlight after making outlandish claims that Tesla would reach $3,000 a share by 2025 and Bitcoin would be worth more than $500,000 by decades' end.
Today she's one of the most forward-thinking, successful, and infamous Wall St. investors today.
"ARK believes that in a world driven by disruption, make sure you're on the right side of change," Wood said in an interview.
Meanwhile, as the CEO of ARK Invest Wood's equity funds help remove the risks involved in investing in potentially huge, revolutionary innovations through her firm's ETFs.
Today we're going to find out: How did Wood come to these outlandish predictions? What's her favorite investment? And is she crazy?
The Genius Move That Made Cathie Wood
The longest bull run ever ended two years ago by a Black Swan event known as COVID-19.
You may have heard of it.
Cathie Wood took advantage of this five-year bull run and disproportionately invested in growth stocks and cryptocurrencies at a time where it was virtually impossible to lose money given the super low rate environment.
It was a solid bet that is just only now trickling down as the Federal Reserve begins to shrink its balance sheet.
However, the thing about Wood's strategy is that it is not time-tested, especially if the market shifts towards higher inflation or stagflation. This is why hardened Wall St. professionals like Peter Schiff and Jim Cramer give Wood shit.
Today YOLO-ing into Tesla and Bitcoin is a lot more of a headscratcher than when Wood did it. This is depending on who you ask, of course.
Cathie Wood's Favorite Investment
Bitcoin.
Bitcoin is not Cathie Wood's favorite investment. But it's close.
Cathie Wood's relationship with cryptocurrency started all the way back in 2015 when Ark Invest purchased shares of the Grayscale Bitcoin Investment Trust.
"ARK believes cryptocurrencies governed by open-source networks are enabling a new paradigm for monetary systems and mechanisms to store and transfer value. [We] believe that cryptocurrency's value and market share dynamics will be 'power law distributed,' meaning that a few cryptocurrencies will capture the majority of value." — Cathie Wood
The most significant Bitcoin ETF that ARK manages is their "Next Generation Internet ETF" which has grown nearly 200% since mid-2020.
Cathie Wood Sees a $500,000 Bitcoin
While Ark Invest doesn't invest directly in Bitcoin, Cathie Wood's fund continues to invest in companies with heavy exposures to cryptocurrency. For instance, Ark has made some significant investments in cryptocurrency exchange giant Coinbase and Jack Dorsey's Square.
Wood's prediction for Bitcoin is that one BTC will reach $500,000 per coin by 2026.
This is one of the most aggressive calls by a major fund manager. It's probably why gold bugs like Peter Schiff despise her so much.
And now that cryptocurrency has died down over the last two months, it cements the fact that investors like Cathie Wood have the most to gain but also, by far, the most to lose.
Cathie Wood's Actual Favorite Investment
On CNBC's Squawk Box Cathie Wood explained that while she believes Bitcoin is greatly undervalued, she thinks that Ethereum is still way undervalued compared to it.
According to her, Ethereum is still in its infancy when compared to Bitcoin. She added that institutions are going to move more into DeFi and NFTs, which would "accelerate" its growth.
"The fact that it is the venue, or the protocol, for DeFi and for NFTs suggests to us that it is even more undervalued than Bitcoin is, just because there are new worlds growing up on top of it," Wood told CNBC.
She didn't add a price prediction — very un-Cathie Wood of her — but if she believes Bitcoin will reach $500,000, you can only imagine what she feels for Ethereum then.
Final Thoughts
There's a certain pattern when it comes to institutional interest in crypto.
The innovators and tech-minded people are getting involved first. Your Cathie Woods, Elon Musks and Mark Cubans of the world.
And the more traditional financial people are getting in last: your Jamie Dimon's and Kevin O'Leary's.
Over the next few years, we're going to find out who made the right call — and my prediction is that we're going to see a lot more traditional finance folks jump into the fold.
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Ever since I was a child it was my dream to become a financial advisor. Unfortunately, it never came true. Therefore I am not a financial advisor and you should do your own research and not just listen to random people on the internet. Nothing contained in this publication should be construed as investment advice.
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