Cathy Wood10 Dec 2021 17:00
The price of bitcoin could surge to more than $500,000 as institutional investors begin to allocate to the relatively new cryptocurrency space, Ark Invest's Cathie Wood told CNBC in an interview on Thursday.
Wood explained that institutions are always in search of investments that are uncorrelated to traditional asset classes like stocks and bonds, and crypto fits that bill.
"I think institutions are moving in [to crypto] right now," Wood said, adding that they currently prefer the two largest cryptocurrencies, bitcoin and ether. As a whole, according to Wood, institutions barely have any exposure to the space.
"The reason institutions are moving in is to some extent this is a new asset class with correlations very different compared to other asset classes," Wood explained. A study conducted by Ark Invest found that the asset with the closest correlation to bitcoin is real estate.
That runs counter to the commonly held belief that cryptocurrencies are risk assets that move in tandem with broader moves in the stock market. For example, amid the Omicron-induced stock market sell-off last week, bitcoin entered a bear market, falling more than 20% from its recent high.