Name: Ark's Wood on Bitcoin, Fed Rate Cuts, Support for Crypto
Uploaded: 2025-03-19T06:19:37.000Z
Duration: 14 min 37 s
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I want to start right with Bitcoin and what you see is the outlook for Bitcoin's price.

In recent weeks you've come out and said one point five million dollars per Bitcoin by the year 2030.

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Since then though we've seen quite a few outflows.

I think right now we're in a risk off period generally.

And if you've been watching Bitcoin it's almost been a leader in terms of risk on risk off.

If if we look at our on chain analytics what we see is I'm sorry I have to get this off.

If you look at our on chain analytics which you will see is that we are in the middle of a little bit more than halfway through a four year cycle.

We think we're still in a bull market and we believe that the deregulation that we're seeing here in the United States is is going to be very important to institutions moving into this new asset class.

Asset allocators have to have a point of view on this new asset class.

And we think by putting it in portfolios risk adjusted returns for the entire portfolio will go up.

One question I have to the point you're making here on where the risk appetite stands around Bitcoin versus other asset classes.

Kathy if you had to choose where you would buy the dip the most would it be in Bitcoin Tesla or NVIDIA.

Well we we post our trades every day and you'll see that we've been buying Tesla and names that mimic Bitcoin and other crypto assets like like Coinbase like Robin Hood taking advantage of this risk off period.

So what does this mean in terms of where you think see things going.

Do you see more of a sell off before things get better in these risk assets.

How do you know that we're not at the lows.

So one of the things we think is going on right now is and Treasury Secretary Besant today said he does not believe that we're going into a recession.

We think we've been in a rolling recession and that we are actually going to see some negative quarters here.

And that's because the velocity of money is collapsing as people.

The labor force is worried that we're talking about federal state and local quasi government categories like education and health care.

There's a lot of fear around job security right now.

We see the velocity of money coming down.

And we do think we'll see one or two negative quarters.

What we believe that will do is set this administration up and the Fed up with more degrees of freedom for tax cuts and perhaps lower interest rates or at least ending quantitative tightening.

What do you see as the rate path for this year.

The Federal Reserve kicking off its two day policy meeting today.

We're going to hear from Jay Powell tomorrow.

How many rate cuts do you see happening this year.

Well we tend not to be very short term in our focus.

But if we're right and inflation is going to surprise on the low side of expectations we wouldn't be surprised to see two or three cuts.

Now if you look at an indicator called true inflation it's probably the broadest measure of inflation out there.

It is saying inflation is down to one point six five percent.

Well below where the Fed is pinning it at roughly the CPI is two point eight percent.

And we believe that the combination of actually food prices have started coming down.

Even egg prices have started to collapse as a matter of fact.

We're seeing some rent prices coming down.

So we think inflation is going to surprise on the low side of expectations for those reasons.

And because innovation is inherently deflationary and our five innovation platforms are all driving different kinds of deflation good deflation which will cause unit growth but deflation nonetheless.

So we think the Fed is going to have many more degrees of freedom in the second half of this year than most people think.

We could see more than the number I just suggested two to three.

Kathy you and I have spoken quite a bit over the last few months.

You were optimistic about the Trump administration specifically with regard to disruptive technology in your thesis but also with cryptocurrency.

You just spoke about the easing regulatory environment around crypto.

I'm curious though what you think about President Trump's relationship with crypto.

The Wall Street Journal reported that the Trump family has held deal talks with finance following that guilty exchange plea.

And then also you have the president getting into meme coins.

Are you at all concerned that that the Trump family is too close to crypto.

Well I think the Trump family is very supportive of crypto which is which is great.

It's completely different from the environment we have been in our view on meme coins.

We would not be putting them into our our various private funds because and I think that you know the combination of A.I. and block chain technology is creating millions millions of these mean coins.

We think most of them are not going to be worth very much.

We think there are just going to be a few crypto assets that will gain most of the spoils in the entire ecosystem.

Kathy even some of the people who believe most firmly in the crypto story here they are still worried about those meme coins and a lot of retail investors being stuck holding the bag.

And another thing that's happening at the same time is you have a lot of exchanges looking to loosen their listing standards.

Do you worry that this could go too far that too many coins that are going to hurt retail investors ultimately will be listed on too many exchanges.

Well I think that the FCC did a very important thing in declaring these meme coins not securities.

What they essentially were saying is we are not going to regulate them and it's buyer beware.

And so if I have one message or those listening who are buying meme coins buyer beware.

And I think the message is loud and clear from the regulators.

What we think will happen is there will be some fearsome declines in the prices of some of these meme assets.

And you know there's nothing like losing money for people to learn and they'll learn that the FCC and regulators are not taking responsibility for these meme coins.

Because you did say that you believe that there are only certain crypto assets that will gain the most spoils.

That the millions of meme coins will probably end up worthless.

So when we're talking about the big three we're talking about Bitcoin Ethereum Solana the use cases for those are multiplying.

And we think they're going to become very important in the years ahead.

Is that one of the ones that you think will become worthless.

Meme coins will be collectors items as so digital collectors items.

And so of course some will withstand you know will withstand the judgment of time.

But our working assumption is that when you're talking about millions of meme coins you know that that's just a step too far and that most most of them are not going to be worth very much.

Kathy I want to switch gears here a little bit and talk about something that I know you've been focusing on a lot tokenization.

Now one question I have about this is do you think the investment community particularly the venture community is underestimating how catastrophic this could be to their business model.

If you have companies that can raise money through tokens rather than through traditional venture capital and go public this way or list this way rather than through the traditional listing process is that a sea of change coming for the way that this has typically been done.

But you know in terms of our own venture fund and we did start an interval fund which is a 40 act fund.

I mean we could see tokenizing that putting it on the blockchain and enabling many many more people to get involved with the private world.

And I think other venture capital firms could do much of the same thing.

I do agree there's going to be a lot more competition a lot more ways to fund new companies.

So I'd say this new world is going to be complicated.