Compass Investments

Bitcoin vs. Dollar

📌 Bitcoin is insurance against corrupt regimes: Kathy Wood.

Ms. Wood emphasized that BTC is an insurance against currency devaluation and loss of purchasing power and wealth. Btc

– Ms. Wood emphasized that BTC is an insurance against currency devaluation and loss of purchasing power and wealth.

Katie Wood, founder and CEO of leading investment management firm Ark Invest, believes bitcoin (BTC) is an insurance policy against rogue regimes as more users switch to bitcoin (BTC) as their currencies devalue.

In an interview with CNBC, Wood described bitcoin as a hedge against falling values and loss of purchasing power and wealth, arguing that the massive proliferation of digital assets is indicative of a flight to safety in many parts of the world.

In the past few months, several fiat currencies have depreciated against the US dollar as countries suffer from high inflation. The value of the Nigerian naira has fallen by more than 50% and the Egyptian pound by about 40%.

Other currencies include the Argentine peso, Japanese yen, Turkish lira, Lebanese pound and Pakistani rupee. The free fall of these currencies has caused BTC to reach all-time highs against them long before it reached a new peak against the U.S. dollar.

Wood believes that the devaluation of these currencies and the influx of bitcoin ETFs into the spot market have led to BTC’s sharp rise in recent weeks. Users saw cryptocurrencies as a hedge against unfavorable monetary policy and chose to store their money in cryptocurrencies.

Believe it or not, this is a flight to safety. Hedging against devaluation. Insurance against loss of purchasing power and wealth. …… I think it’s insurance against rogue regimes and terrible fiscal and monetary policy,” said the founder of Arc Invest.

Ms. Wood also explained that this is not the first time bitcoin has taken off during a traditional financial crisis. She cited the US banking crisis in March 2023, when a local bank collapsed and BTC subsequently soared by about 40%.

In March and April last year, about four U.S. lending institutions, including Silvergate and Signature Bank, ceased operations after a sharp outflow of deposits. While the stock prices of the affected financial institutions plummeted, BTC moved in the opposite direction, posting significant gains despite the cryptocurrency market suffering from a bear cycle attack.

According to Arc Invest’s CEO, cases like this show that BTC has no counterparty risk and is both a risky and risk-free asset.

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