Cathie Wood says Elon Musk will eventually prove positive for bitcoin - and predicts central banks will begin adding crypto to their balance sheets

May 28, 2021

Cathie Wood says Elon Musk will eventually prove positive for bitcoin - and predicts central banks will begin adding crypto to their balance sheets

Cathie Wood is the founder, CEO, and CIO of ARK Investment Management. Elon Musk is the SpaceX owner and Tesla CEO.
Ark Invest, File (for Wood) and Hannibal Hanschke/Pool Photo via AP, File (for Musk).

Cathie Wood said Elon Musk will prove to be more positive for bitcoin in the long-term.
"He has encouraged a lot more conversation, a lot more analytical thinking," she said at Consensus 2021.
She predicted central banks will begin to add cryptocurrencies to their balance sheets.
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Elon Musk's role in highlighting bitcoin's environmental concerns contributed to the recent cryptocurrency crash, but his influence over the digital token will be more constructive going forward, according to Cathie Wood.

Bitcoin, which has lost about 50% of its value over the last few weeks, was last trading around $37,000 on Friday. The highly volatile asset class steadily has crept into the mainstream over the past year, but lost momentum, as debate over its energy-intensive mining process has emerged.

"It was precipitated by the ESG [environmental, social and governance] movement and this notion, which was exacerbated by Elon Musk, that there are some real environmental problems with the mining of bitcoin," Wood said at CoinDesk's Consensus 2021 conference this week. "A lot of institutional buying went on pause."

Wood said she guessed Tesla was cautioned by its ESG-conscious investors like BlackRock, whose CEO Larry Fink is especially committed to putting climate change at the center of investing strategy.

But the star investor is optimistic about bitcoin's long-term potential and expects Musk will be a positive figurehead for its environmental reputation. "He has encouraged a lot more conversation, a lot more analytical thinking. And I do believe he's going to become a part of the process," she said.

The billionaire Tesla boss recently suggested top miners should prove they're using green energy to mitigate its negative image.

Wood also predicted some central banks could begin adding cryptocurrencies to their balance sheets as their own currencies face the risk of devaluation.

"I wouldn't be surprised if some of these emerging-market central banks start accumulating bitcoin and other (crypto) currencies, because they know their currencies are going down, and they will be under attack as reserves go down," she said. "Maybe they'll have a balance with bitcoin and other crypto-assets."

Regulators may also adopt a more friendly stance toward the space out of fear of missing out on the innovation the sector brings with it, she said.

Wood's investment firm Ark Invest published a report last month that suggested bitcoin mining encourages the adoption of renewable energy and could enable cleaner energy solutions.

Read the original article on Business Insider