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Recent trends indicate a significant migration of investors from gold to Bitcoin, catalyzed by the emergence of spot Bitcoin exchange-traded funds, as highlighted by ARK Invest CEO, Cathie Wood.
Bitcoin Gains Momentum as Alternative to Gold
Speaking on ARK Invest's YouTube channel in a conversation with chief futurist Brett Winton, Cathie Wood emphasized Bitcoin's rising prominence compared to gold.
Wood noted that Bitcoin has been steadily gaining ground relative to gold, with investors increasingly favoring the cryptocurrency due to the availability of more accessible avenues for Bitcoin investment.
Wood expressed confidence that Bitcoin will establish itself as a "risk-off asset" akin to gold, particularly during periods of weakness in the banking sector. She cited the notable surge in Bitcoin's price, soaring by 40% during a regional bank crisis in the United States in March 2023, as evidence of its growing stature as a safe-haven asset.
Correlation Analysis and ETF Launch Impact
An analysis by Fidelity revealed an increased correlation between Bitcoin and gold in 2023 despite rising global interest rates. This shift marks a departure from Bitcoin's previous inverse relationship with interest rates. Longtermtrends data indicates that the one-year rolling correlation between Bitcoin and gold has reached 0.80, the highest level on record.
According to Coin Telegraph, despite the short-term price volatility, Wood pointed out that a significant portion of Bitcoin remains in "strong hands," with 15 million out of 19.5 million Bitcoin circulating for over 155 days. This suggests that a majority of Bitcoin holders maintain a long-term investment outlook.
According to Daily Hodl, under Wood's leadership, ARK Invest was among the ETF issuers launching spot Bitcoin ETFs on January 11. According to BitMEX Research data, the ARK 21Shares Bitcoin ETF has already amassed $705.8 million in Bitcoin holdings, positioning it among the leading Bitcoin investment products alongside Grayscale's GBTC, BlackRock's IBIT, and Fidelity's FBTC offerings.
Additionally, ARK Invest has made significant investments in cryptocurrency exchange Coinbase stock (COIN), holding 7.187 million shares valued at $843 million across various ETFs. While the firm has been actively selling COIN shares since June 7, its substantial holdings underscore its continued interest in cryptocurrency.
Photo: Scottsdale Mint/Unsplash
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