ARK Invest founder and CEO Cathie Wood is predicting that the high-profile implosion of FTX will be a boon for one crypto sector.
Wood says in a Yahoo! Finance interview that the collapse of FTX and other crypto firms will boost decentralized finance (DeFi) networks.
“We do believe DeFi will actually get a boost coming out of this because it’s so obvious now – decentralized and transparent is the way to go.
Those networks didn’t skip a beat. All of their transactions were completed, and there are all kinds of metrics saying they’re getting stronger now.”
According to Wood, decentralized networks will become increasingly important in the financial services industry after the bankruptcies of FTX, crypto lender Celsius and digital asset hedge fund Three Arrows Capital (3AC).
“I think what we’re learning because of FTX is how much more important fully transparent decentralized networks will be to financial services going forward.
FTX, Celsius, 3AC were all closed networks. Opaque systems. You couldn’t see what was going on.”
Wood highlights users of decentralized networks were able to exit their trade positions and withdraw without a hitch after crypto prices plunged amid the fallout stemming from the crash of the centralized crypto firms.
“And what happened, as they [centralized crypto firms] were going down, the people who were on the fully transparent distributed networks were able to get out scot-free.
They saw that was going what was going on. There were margin calls for those who were over-leveraged.
But the system worked. It didn’t skip a beat. Those other companies went out of business.”
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