Bitcoin Edges Ahead of Gold as Cathie Wood Predicts Further Declines
Cathie Wood, CEO of ARK Invest, sees a significant shift in the market with Bitcoin reclaiming its upper hand against gold. Wood stated that ARK's innovation themes, such as blockchain and AI, could drive inflation far lower than anticipated, leading to a decline in gold prices. Since mid-August, Bitcoin has outperformed gold, gaining over 33% compared to gold's 4.5% decline.
The correlation between Bitcoin and gold has turned negative, indicating that they are now moving in opposite directions. ARK's long-term correlation between the two assets was 0.1, which has recently become negative. This change in correlation is a sign that investors are increasingly favoring Bitcoin over gold.
Wood's views on the market are in line with Citi's recent raise of its 12-month Bitcoin target to $113,000. Bitcoin's price has been trading above $85,200, up 0.7% in the last 24 hours. The retail sentiment around Bitcoin on Stocktwits remains in the 'bearish' zone, but chatter has dropped to 'low' levels.
Wood believes that gold peaked around the time President Donald Trump appointed Kevin Warsh as the Federal Reserve's Chair and has been declining since. She expects gold to continue to decline, tied to a wider call on inflation. A new PCE approach might shave 0.2 to 0.4 points off core inflation readings, according to Tom Lee, chairman of BitMine Immersion Technologies.