Cathie Wood Foresees Market Shocks as Rate Hike Panic Dissipates

ARK Invest’s CEO doubles down on disruptive tech bets as Treasury yields retreat—’the Fed’s bark was worse than its bite.’

Why it matters: Wood’s flagship fund surges 32% YTD as crypto and AI stocks rebound. Her latest play? Loading up on Bitcoin miners despite SEC headwinds.

Between the lines: ’When liquidity comes back, it goes to the most beaten-down assets first,’ Wood told CNBC. Translation: Memecoins might moon before your grandma’s blue chips.

The kicker: Wall Street’s ’risk-on’ switch just flipped—but remember kids, the Fed has a PhD in pulling punches until retail FOMO kicks in.

Reviving Risk Appetite

Wood argues that as investors stop fearing interest rate hikes, the market will breathe easier, suggesting the resolution of the narrow market structure. The reliance of the S&P 500 on only a few tech giants has long been a hindrance to a broad-based rally. However, the declining risk premiums and the moderation of the bond yield curve are laying the groundwork for a more widespread upswing. Essentially, while recession forecasts dominate headlines, another story is unfolding behind the scenes.

While many economists persistently expect a slowdown, Wood believes that productivity gains can drown out the noise. Companies investing in artificial intelligence and automation may see unexpected surges in profitability while reducing costs. In such a scenario, investors opting to “stay in cash” risk falling behind.

Bitcoin–Gold Performance Comparison

Another focus for Wood is the long-term balance between Bitcoin$93,757 and gold. Gold’s recent parabolic rise temporarily weakened the Bitcoin/gold ratio. Yet, Wood remains optimistic, stating, “The trend hasn’t broken; Bitcoin still maintains its edge.” Historically, the ratio has tested new peaks after each correction.

Currently, Bitcoin is trading around 94,661 dollars. As global liquidity eases, demand for cryptocurrencies is expected to increase. Gold continues to draw strength from geopolitical uncertainties. The competition between these two stores of value is reshaping portfolio allocations as investors ponder “which is the SAFE haven, and which is the growth engine?”