Cathie Wood of Ark Invest believes that the turmoil in the crypto market caused by the failure of the formerly trusted Terra UST stablecoin has given the regulators and the FED more ammunition to regulate the crypto space.
Cathie Wood’s Bitcoin Monthly Opinions
The Chief Investment Officer at Ark Invest, a reputable asset management company, aired her opinion on the current state of the crypto market in her YouTube video series ‘In The Know’ where she talks about the general state of the economy based on fiscal and monetary policy.
Cathie Wood mentioned that because of the crypto market’s needs and the increasing involvement of the public in the space, the YouTube series has launched ‘Bitcoin Monthly’ where issues affecting the market will be talked about.
According to the analysis and research of the team behind ‘Bitcoin Monthly’, they noticed a consistent 9-week decline in the Bitcoin market. Cathie questioned the decline and asked the team for the possible reasons, they could not be identified. However, in the last month, it is clear what shook the bitcoin market price which is the crash of the ‘worthless’ Terra blockchain.
According to Cathie, when the market capitalization of the UST stablecoin went from $350million to about $6.3 trillion, with many reputable advocates for the coin it looked very hyperinflationary and not normal. She noted that algorithmic Stablecoins do not make any sense to her, and with a background in economics, she didn’t see how an asset backed by algorithms and no tangible asset would have been successful.
“The idea that such an instrument would exist has probably given the Regulators more ammunition to regulate in the space, and the Fed could be involved in the regulation.” Cathie Wood stated in the Youtube video.
However, this situation caused the decline in Bitcoin in the last month because the LUNA stablecoin was backed by about $3 billion worth of Bitcoin which they had been building over time, according to Cathie. When it all failed Bitcoin suffered a decline.
Also, in her analysis of the 9-week decline in Bitcoin, she stated a few metrics for the cause. One might be Bitcoin’s correlation with the NASDAQ, another is the presence of more long-term holders of Bitcoin than the long-term in the market, as well as the trading of Bitcoin futures.
In conclusion, she noted that her team will be giving more opinion analyses on the crypto market with an emphasis on Bitcoin for now.
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