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Cathie Wood’s ARK Investment Management argued that Bitcoin (BTC-USD) can potentially be viewed as a “risk-off” asset, despite the fact that many investors view the digital currency as rather volatile in nature.
“While its explosive growth and price volatility have led many investors and asset allocators to deem Bitcoin the epitome of a risk-on asset, we believe that the Bitcoin network embodies risk-off characteristics that enable financial sovereignty, reduce counterparty risk, and enhance transparency,” ARK Invest stated in an investor note.
The exchange traded fund issuer added that Bitcoin’s core attributes make scarce, liquid, divisible, portable, transferable, and fungible asset. “As the network matures, asset allocators are likely to evaluate seriously bitcoin’s merit as a risk-off asset,” the firm contended.
Countering arguments that the cryptocurrency has been traditionally volatile in nature, ARK noted that Bitcoin’s price volatility has diminished over time. See the below chart that the ETF issuer provided:
See below the year-to-date price action on Wood’s six actively managed ETFs, along with the firm’s Bitcoin backed ETF.
- ARK Innovation ETF (NYSEARCA:ARKK) -15.9%
- ARK Next-Generation Internet ETF (NYSEARCA:ARKW) +0.9%
- ARK Autonomous Technology & Robotics ETF (BATS:ARKQ) -11.2%
- ARK Genomic Revolution ETF (BATS:ARKG) -26.2%
- ARK Fintech Innovation ETF (ARKF) +2.3%
- ARK Space Exploration & Innovation ETF (ARKX) -6.1%
- ARK 21Shares Bitcoin ETF (ARKB) +33.4
Read More: Cathie Wood’s ARK Invest: Bitcoin can be a ‘risk-off asset’