ARK Invest CEO Cathie Wood predicts that the approval of a spot Bitcoin exchange-traded fund (ETF) will likely have a short-term negative impact on the cryptocurrency market as some investors may “sell on the news”. However, she maintains a positive long-term outlook for Bitcoin and the potential of a spot Bitcoin ETF.
Spot Bitcoin ETFs are investment products that track the price of Bitcoin directly, allowing investors to gain exposure to the cryptocurrency without having to actually hold it. While spot Bitcoin ETFs have not yet been approved in the United States, there is growing anticipation that regulatory authorities may soon grant approval. Wood believes that if and when a spot Bitcoin ETF is approved, it will lead to a surge in demand for Bitcoin and increase its liquidity.
In the short term, Wood expects that investors who were eagerly awaiting the approval of a spot Bitcoin ETF may choose to sell their holdings and take profits, leading to a temporary market downturn. This “sell on the news” phenomenon is not uncommon in financial markets, where investors anticipate positive events and subsequently sell once they occur.
Despite the potential short-term volatility, Wood remains optimistic about the long-term prospects of Bitcoin and the overall crypto industry. She believes that the approval of a spot Bitcoin ETF will be a significant milestone for the cryptocurrency market, providing increased accessibility and legitimacy for Bitcoin as an investment asset.
Wood’s perspective aligns with the views of other industry experts who see the approval of a spot Bitcoin ETF as a positive development for the market. Such ETFs could attract a new wave of institutional and retail investors, potentially driving up demand and pushing Bitcoin prices higher.
In addition to the potential for a spot Bitcoin ETF, Wood also highlights other catalysts that could contribute to Bitcoin’s long-term growth. These include increased adoption by institutional investors, the potential rollout of a central bank digital currency in the United States, and the ongoing digital transformation of the global financial system.
Overall, while the approval of a spot Bitcoin ETF may trigger short-term volatility, Wood sees it as a positive development with the potential to further establish Bitcoin as a mainstream investment asset. She remains bullish on the long-term prospects of Bitcoin and believes that the approval of a spot ETF will only serve to enhance its position in the financial world.