The CEO of cryptocurrency and technology investment firm ARK Invest believes that crypto assets will take a big turn this year, with lower inflation and a shift from the Fed.
In a video on the company’s blog Jan. 23, Cathy Wood, ARK Invest’s CEO and chief investment officer, begins with an overview of the macroeconomic outlook. She said there are all kinds of signs that inflation is declining, which “suggests the Fed may soon change its stance.”
This will be beneficial for risky assets such as cryptocurrencies as the macroeconomic outlook improves and financial pressures ease.
She added that the company believes inflation will fall to the Fed’s 2% target. However, Wood predicted that inflation could fall below this level and even into negative territory due to the reduction in the money supply.
The market is waiting for a signal from the Federal Reserve, she said, adding, “We think this will happen in the first half of 2023.” She said ARK Invest’s portfolios should do very well if interest rates are about to fall below expectations.
ARK owns a crypto-asset fund, blockchain venture investments, a disruptive innovation fund, and six active technology and financial technology-based exchange-traded funds (ETFs).
Meanwhile, ARK’s Head of Futures Brett Winton spoke about artificial intelligence (AI), stating that progress will accelerate in 2023. He also predicted that crypto assets will experience significant disruption this year.
“Public blockchains, cryptocurrencies, and crypto assets that are going through a period of turbulence now will become even more unique because of their scarcity in an era of plenty.”
He added that when there is a shift in the macro environment and the Fed “changes its stance,” the opportunity to “expand and realize value in the overall market and risk range is greater.”
Wood concluded that these technological innovations are deflationary factors, which will “lead to a boom in products and services associated with this innovation.”
ARK Invest’s latest move was to leverage some of its holdings in the Grayscale Bitcoin Trust (GBTC) and hold 320,000 shares of Coinbase (COIN), worth about $17.6 million.