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Crypto Market Cap To $25 Trillion: Cathie Wood Reveals The 2 Coins To Buy

Cathie Wood, CEO of Ark Invest, has reiterated her bullishness on the crypto industry. In a recent interview with CNBC’s “Squawk Box,” Cathie Wood argued that the crypto industry is poised to reach a $25 trillion valuation, given a regulatory breakthrough in the US. Out of the multitude of digital assets on the market right now, Wood sees two cryptocurrencies driving much of that growth: Bitcoin and Ethereum.

Cathie Wood Predicts $25 Trillion Crypto Ecosystem

The entire crypto industry has witnessed unprecedented growth since the middle of October. According to data from Coingecko, the entire crypto market cap has increased 35% from $1.096 trillion on October 15th to a current value of $1.4828 trillion. 

However, Cathie Wood is of the notion that this growth isn’t over, and the industry will reach a $25 trillion valuation in the near future. A $25 trillion market cap means the industry would have to grow a whopping 1,585% from its current level.

Cathie Wood had predicted earlier in 2021 that Bitcoin would climb more than 10 times its value in the next five years, back when the asset was still trading around $50,000. Given that Bitcoin is now selling at around $37,000, the host of Sqwauk Box, Andrew Ross Sorkin, questioned Wood as to whether or not she still stands by her prediction.

“If we have this conversation in ‘25, ‘26, are you on track?” Sorkin asked.  “Yes,” Wood replied.

The CEO did mention that this growth would be feasible only if there were a regulatory green light to allow financial institutions to participate in the cryptocurrency market. She also brought up the role that Spot Bitcoin ETFs will play in the projected spike, particularly BlackRock and Coinbase’s plan to offer a spot Bitcoin ETF in the US.

“I think BlackRock and Coinbase’s partnership is going to be very important,” she said.

Crypto total market cap chart from Tradingview.com (Cathie Wood $25 trillion 2 coins Bitcoin Ethereum)

Bitcoin And Ethereum The Ones To Look Out For

Wood specifically called out two coins to look out for as catalysts for this growth: Bitcoin and Ethereum, the two leading assets. This isn’t surprising, as these two assets have developed better price stability than most over the years. 

“Our expectation is that the crypto asset ecosystem will be dominated [by Ether and Bitcoin], and it will scale from a little more than $1 trillion today to $25 trillion in 2030 as this new world develops,” Wood explains.

The ARK Invest CEO has been a long supporter of Bitcoin. In another interview, she said she would prefer to hold Bitcoin for 10 years over cash and gold. The CEO is also no stranger to Bitcoin price predictions, as she has previously said that BTC will go to $500,000 and even reach $1.48 million in the next seven years.

According to CoinShares’ latest report, investment products tied to digital assets just reached a yearly institutional inflow of $1.14 billion. The majority of this money ($1.083 billion) has gone into Bitcoin investment products. This could signal the beginning of large-scale institutional investor participation that Wood believes will propel the crypto market cap to $25 trillion.

ARK Invest is also waiting for the SEC’s green light on its spot Ethereum ETF application. Approval of a Spot Bitcoin ETF by the SEC is expected to propel the crypto market into the next bull run.

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Why Ark Invest’s Cathie Wood Picks Bitcoin Over Cash And Gold

Ark Invest CEO Cathie Wood was a guest on Merryn Somerset Webb’s show ‘Merryn Talks Money’, where she discussed the macro environment and the recent happenings in the financial world. What will mainly interest the crypto community is what she had to say about the flagship cryptocurrency, Bitcoin. 

“Bitcoin Hands Down”

When quizzed by Merryn about which she would prefer to hold for 10 years between gold, cash, and Bitcoin, Wood replied by saying, “Bitcoin hands down.” She noted that while Bitcoin and Gold both have hedging functionalities, the latter already had its time, unlike Bitcoin, which she labeled as “new” and was just gaining steam. 

While highlighting Bitcoin’s future potential and “incremental demand,” she stated that institutions were still barely involved and that the major investors of the future (the “young people,” as Wood put it) would prefer to hold Bitcoin over Gold. She also mentioned that Bitcoin has been outperforming Gold recently in terms of its hedging capabilities.  

Wood’s bullishness on the foremost cryptocurrency may not come as a surprise to many, considering that her company, ARK Invest, is one of many asset managers who have applied with the US Securities and Exchange Commission (SEC) to offer a Spot Bitcoin ETF. 

Interestingly, her company leads the race toward approval as the SEC is expected to make a decision (possibly approve) on their application in January 2024, with decisions on the other applications to come after. However, it remains to be seen if that is what will happen, as the SEC can choose to approve (if it does) all funds at the same time. 

Cathie Wood Recognizes Bitcoin’s Importance

Earlier in the interview, Wood highlighted the price of Bitcoin as one of the things her company was monitoring in relation to the financial markets and deciding on how to gauge the inflation rate. 

She alluded to how Bitcoin’s price rose from $19,000 to $30,000 during the regional banking crisis that occurred back in March with a couple of banks like Silicon Valley Bank collapsing. 

She described Bitcoin’s rise during that period as “fascinating” and how many saw the cryptocurrency as a “flight to safety vehicle.” While many have in the past touted Bitcoin as a hedge against Inflation, Cathie Wood believes it can go both ways as the cryptocurrency can also serve as a hedge against deflation because there is no counterparty risk in Bitcoin. 

She seemed to suggest that Bitcoin was a haven for many, especially with the banking crisis, because it was completely “transparent and decentralized,” unlike banks where customers do not know anything about what goes in there and how their deposits are being used or safeguarded. 

Bitcoin price chart from Tradingview.com