Cathie Wood, CEO of ARK Invest, has shared her insights on the potential impact of a Trump administration on Bitcoin (CRYPTO: BTC) and decentralized finance (DeFi). Wood believes that the administration could bring much-needed "regulatory clarity" to the fintech sector, particularly if Gary Gensler steps down from his position.
What Happened: During a webinar prerecorded on Nov. 15 and published on Friday, Wood discussed how the Trump administration might influence the digital asset revolution, led by Bitcoin.
"If Gary Gensler leaves, that is going to open us up to regulatory clarity and probably, given the Trump administration's pronouncements over the last few month, give much more focus on digital asset revolution, broadly led by Bitcoin, which they may put in the Treasury's strategic reserve," she said.
Wood suggested the possibility of adding Bitcoin to the U.S. Treasury's strategic reserve, given the current circulation of over 19 million Bitcoin and a cap of 21 million. According to Wood, the government might aim to acquire 1 million Bitcoins over time.
Regarding DeFi, Wood highlighted the potential for peer-to-peer lending to remove intermediaries in financial transactions. Yassin Elmandjra, ARK's director of digital assets, noted the accelerating trend of using cryptocurrency for commerce, driven by technological and regulatory advancements.
Elmandjra stressed the importance of governments establishing clear regulations on compliance, tax implications, and consumer protection to enable businesses to navigate the evolving landscape effectively.
Why It Matters: Wood's predictions come amidst her ambitious price targets for Bitcoin, including a bull case of $3.8 million if more companies incorporate the cryptocurrency into their balance sheets. However, a recent Benzinga survey revealed skepticism, with 83% of respondents doubting this target will be met by 2030.
Additionally, ARK Invest has identified an "uptrend" in Bitcoin's market structure, attributed to oversold conditions in the Stablecoin Supply Ratio Oscillator (SSRO). This indicator, which measures Bitcoin's potential purchasing power, hit a significant low in September, a level not seen since the 2022 bear market. The SSRO is calculated by dividing Bitcoin's supply by the supply of major stablecoins, providing insights into Bitcoin's market dynamics.
Price Action: As per Benzinga Pro, at 8:03 am ET, Bitcoin was trading at $98,764.01, Ethereum (CRYPTO: ETH) at $3,345.98 and Dogecoin (CRYPTO: DOGE) was at $0.4045. In the past 14 days, post the elections, Bitcoin's value experienced 29.9% increase, Ethereum increased by 14.7% and Dogecoin saw a 105.5% hike.
Meanwhile, ARK 21Shares Bitcoin ETF (BATS:ARKB), which provides exposure to bitcoin which is kept in cold storage was trading only slightly higher at 0.58% during pre-market hours.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image courtesy: ArkInvest
