Bitcoin Outperforms Gold as Cathie Wood Sees Further Decline for Metal
Cathie Wood, CEO of ARK Invest, believes the 'turn is in' for Bitcoin against gold. In a recent episode of In the Know, Wood said, 'We do think the turn is in here for Bitcoin.' Since mid-August, Bitcoin has outperformed gold, gaining over 33% compared to gold's nearly 5% decline. Wood attributes this to ARK's innovation themes, such as blockchain and AI, driving inflation lower than anticipated.
According to Wood, the correlation between Bitcoin and gold has recently turned negative, indicating that the two assets are moving in opposite directions. This is a significant shift from their previous correlation of 0.1, which ARK's study found to be 'no correlation.' Citi recently raised its 12-month Bitcoin target to $113,000, citing a positive outlook for the cryptocurrency.
Wood also expressed her expectation that gold will continue to decline, citing the latest Personal Consumption Expenditures (PCE) report, which showed headline inflation at 3.4% year-over-year in August. She tied this view to a wider call on inflation, suggesting that ARK's innovation themes are driving inflation lower than anticipated.