In a significant shift within the cryptocurrency landscape, Cathie Wood, CEO of Ark Invest, has expressed the belief that Bitcoin’s traditional four-year cycle may soon be “disrupted.” This assertion comes amid a notable increase in institutional investment in Bitcoin, which Wood posits is changing the dynamics established in previous cycles.
In an interview with Fox Business, Wood outlined that historically, Bitcoin would experience drastic drops, often between 75-90%, during market corrections. However, she has observed a trend of decreasing volatility in the asset’s price lately, suggesting that institutional engagement could mitigate severe declines. Wood remarked, “We may have seen the low a couple of weeks ago,” indicating a potential stabilization in Bitcoin’s price due to this influx of institutional support.
Bitcoin’s halving events, which occur every four years and reduce the mining reward by half, have traditionally been correlated with subsequent bull runs due to the decreased supply of new Bitcoin entering circulation. The most recent halving occurred on April 20, 2024, cutting the reward to 3.125 bitcoins per block. Given this context, Wood’s perspective is particularly radical, as she contends that Bitcoin is becoming more akin to a “risk-on asset.” This categorization aligns Bitcoin’s movements with broader economic trends, such as those affecting stocks or real estate, as opposed to being a safe haven like gold during periods of financial distress.
Wood draws parallels between Bitcoin’s historical role as a risk-off asset during crises, including the European sovereign debt crisis and the banking turmoil witnessed in the U.S. in 2023. Yet, she believes the asset has recently shifted back towards a growth-oriented investment narrative. “Now, gold is more of a risk-off asset,” she noted, suggesting that investors are increasingly using gold to hedge against geopolitical uncertainties.
Compounding these views, a report from multinational bank Standard Chartered echoed Wood’s predictions, stating that the emergence of Exchange Traded Fund (ETF) buying is rendering the traditional halving cycle obsolete as a determinant of Bitcoin’s price trajectory. Standard Chartered analyst Geoffrey Kendrick articulated that the rationale driving past price movements—specifically, that Bitcoin prices would peak approximately 18 months post-halving—no longer holds true in light of new market dynamics created by ETF involvement. The bank has subsequently lowered its Bitcoin price target for 2025 from $200,000 to $100,000, reinforcing their stance that institutional engagement is altering long-standing price behaviors.
As the cryptocurrency market continues to evolve, both Wood and Standard Chartered’s outlook suggest a transformative phase for Bitcoin, potentially signaling a departure from the patterns historically observed in its valuation. Meanwhile, Ark Invest has been proactive in increasing its stakes in cryptocurrency-related assets, including shares in crypto exchange Coinbase and stablecoin issuer Circle, underscoring their confidence in the digital asset’s future potential.
