The founder of ARK, Catherine Wood, states that the cryptocurrency Bitcoin is a much bigger ‘idea’ than that of Apple.
The chief of the investment management firm, Catherine Wood, places a lot of faith in Bitcoin, a digital asset that has seen a meteoric rise over the course of the year 2017. The digital asset has enjoyed an increase in its prices of more than 1,200 percent within this year alone.
She commented to CNBC’s “Halftime Report” that she believes that Bitcoin is a much more significant concept than that of Apple corporation, which, in and of itself is a ‘pretty big idea.’
The investment officer noted that her fund is not able to directly invest into and hold the cryptocurrency, so instead of walking away, chose to purchase shares of GBTC, a Bitcoin Investment Trust.
The firm invested in GBTC two years ago, in 2015, when Bitcoin had prices from the $200 – $300 range. They wanted to invest to be able to be exposed to the currency in a manner that was acceptable and to participate in the potential growth.
Investing in GBTC is a good workaround for the Institutional type of investors like mutual funds, hedge funds, pension funds, index funds, commercial banks, endowments and others who seek to minimize their exposure to extreme volatility and have much higher concerns on the aspect of safety.
Institutional investors must focus on the safety of the funds and must continually grow the funds that they manage; they have a higher mandate because they manage funds of a variety of individuals and institutions. Thus, these sort of investors are expected to be more cautious and conduct more research thus avoiding riskier securities like Bitcoin. These type of firms look at traditional markets and allocate toward equities, gold and other areas for their portfolio.
As per GrayScale, GBTC, a Bitcoin Investment trust enables investors to gain exposure to the price movement of bitcoin through a traditional investment vehicle, without the challenges of buying, storing, and safekeeping bitcoins.
“The Bitcoin Investment Trust is a traditional investment vehicle with shares titled in the investor’s name, providing a familiar structure for financial and tax advisors and easy transferability to beneficiaries under estate laws.”
The trust started out in 2015 with share prices hovering around 49 USD and then progressed upward over the years with a jump in prices in 2017 where share prices are now sitting at a healthy 2,016 USD. The trust experiences fluctuations with ups and downs of the virtual currency Bitcoin.
It is important to note that the Bitcoin trust purchases and holds the pioneer virtual currency. Each share of the GBTC ETF stands at 0.0919 Bitcoin as per the aggregate digital currency holdings present in the trust.
Catherine Wood on Bitcoins Future
Wood notes that the future of Bitcoin is bright as there are possibilities such as a split which would help it realize its full potential, becoming a full-fledged innovative payments network with minimal to no scaling issues.
“Maybe [bitcoin] will do a hard fork, so it has both the store of value role and the means of exchange role.”
ARK is focused on innovations and technology that provides for significant disruptions in sectors and society.
Meanwhile, Apple tries to recover from recent mishap over planned obsolescence
The company has found itself in a bit of hot water lately over its potential intentional design of decreasing the user experience slightly to be later able to tout additional upgrades prompting further purchases.
“We’ve been hearing feedback from our customers about the way we handle performance for iPhones with older batteries and how we have communicated that process. We know that some of you feel Apple has let you down. We apologize. There’s been a lot of misunderstanding about this issue, so we would like to clarify and let you know about some changes we’re making.”
ARK is a leading investment manager focused on disruptive innovation that is changing the way the world works. ARK was formed to capitalize on the opportunities for excess returns created by companies benefiting from technological change. Catherine D. Wood founded ARK in January 2014, after completing 12 years as the Chief Investment Officer of Global Thematic Strategies for AllianceBernstein managing over $5 billion AUM.
Catherine came to recognize that disruptive innovation demands a dynamic and universal approach. By researching across sectors, industries, and markets, analysts can gain a deeper understanding of the convergence and market potential of disruptive innovations, and thus size investment opportunities more appropriately.