ARK Invest head Cathie Wood says that institutional investors could easily drive up the price of Bitcoin (BTC) once they have exposure to an exchange-traded fund (ETF).
In a new interview with CNBC, Wood looks at the possibility that the expected approval of an ETF by the U.S. Securities and Exchange Commission (SEC) could be a “sell-the-news” type event.
According to the investing veteran, fading the ETF approval may have already become too obvious of a position.
“I think so many people are expecting now a ‘sell-on-the-news’ [event] that we might not have a ‘sell-on-the-news’ because once you hear that enough, the positioning has already taken place. So who knows? It’s very short-term, all we know is with our five-year investment time horizon, we think the flows into this new asset class, especially institutional flows but also retail flows – retail has led the charge, of course – that they’re going to be quite substantial, and it won’t take much of an allocation by institutions into Bitcoin to drive what is becoming a scarce asset much higher.”
Wood, an early Bitcoin bull, says that BTC may be acting as a new “substitution” for gold, taking away some of the yellow metal’s market share as the traditional store-of-value asset as it becomes increasingly scarce.
“It is digital gold, and gold is a $12 trillion asset. I think Bitcoin might be up to $800 billion right now. So we do think there is some substitution taking place, and the institutional flows if the allocations were as little as 2.5% to 5% which is where we think they will end up – you’ll see 0.5% and then 1%, you’ll see a legging in – that could be the biggest reason for Bitcoin to go up.
Because we’re at 19.5 million BTC outstanding already. 15 million, roughly, are in long-term hands, they haven’t moved their BItcoin in more than 155 days. And therefore we know we’re only going to 21 million units ever, so this indeed, from 19.5 million to 21 million is becoming a scarce asset.”
BTC is worth $46,853 at time of writing.
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