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With the crypto market rally sending prices of Bitcoin (BTC) and Ether (ETH) skyrocketing, cryptocurrencies are becoming increasingly popular to investors. In fact, the number of crypto users worldwide rose by 15.7% to 106 million for the first time ever in January this year.
While fund managers are generally hesitant to include Bitcoin in their clients’ portfolios at the moment, Ark Invest’s Cathie Wood believes that a time will come when BTC will be better accepted as an asset class. When this happens, the crypto could eventually become part of the recommended portfolio for investors, according to CNBC.
The Ark Invest CEO believes that cryptocurrency will eventually resemble bonds. “We think as it becomes a better accepted new asset class ... We do think it will behave, actually, I would say more like the fixed income markets, believe it or not,” she said on CNBC’s “Closing Bell.”
Bitcoin has been known for its price volatility. The crypto, which traded for just under $10,000 in September 2020, more than quintupled its price in February 2021 when it reached a new all-time high above $58,000.
BTC’s price retreated after a series of corrections and is trading at $55,950 at the time of writing based on data from Coinmarketcap. But despite its volatility, Wood said that Bitcoin’s price could stabilize over time that it could become part of the recommended portfolio for investors, where investors might allocate 20 percent for the crypto.
“If you think about bonds from this level, this idea of a 60-40 balanced portfolio is a bit problematic,” the Ark CEO said. “We’ve been through a 40-year bull market in bonds. We would not be surprised to see this new asset class become a part of those percentages. Maybe 60 equity, 20, 20.”
Wood also expressed confidence in Tesla despite the electric car maker’s share losing ground recently, according to Markets Insider. This confidence appears to come from the fact that the company did not lose its market share despite competition.
Her assessment of Tesla proved to be spot on. The electric car marker’s shares jumped 20 percent on Tuesday adding a whopping $25 billion to Elon Musk’s fortune in just one day, according to Mint.
