Cathie Wood: Shift from Gold to Bitcoin as Gold Hits Extreme

Cathie Wood’s case for shifting from gold to Bitcoin begins with a stark statistical warning about the precious metal’s valuation. She highlighted that the ratio of gold to the M2 money supply—a broad measure of cash and checking deposits—has reached an all-time high. “It has never been higher. It hit a new all-time high this week,” Wood stated, drawing a direct parallel to historical periods of extreme macroeconomic stress. She noted that the only two previous instances where this ratio approached such elevated levels were during the massive inflation of the 1970s and early 1980s and the Great Depression. “Gold is probably riding for a fall,” Wood cautioned, suggesting the current setup resembles a historical extreme that may not be sustainable under today’s economic regime.

This analysis forms the core of her tactical shift. By positioning gold’s surge as an anomaly tied to specific, past macro regimes, Wood directly challenges the narrative that its recent outperformance over Bitcoin signifies a lasting trend. Her argument reframes gold’s strength not as a new bull market foundation, but as a potential peak, creating a comparative opportunity for assets with different fundamental drivers.

Against gold’s perceived vulnerability, Wood pitched Bitcoin’s structural advantages, primarily its deterministic and decelerating supply schedule. “The supply growth of Bitcoin is 0.8% per year and it’ll drop to 0.4 in another two years,” she explained. She contrasted this with gold, where she pegged average supply growth at about 1% and suggested mining output could potentially run higher. This predictable scarcity is a cornerstone of ARK Invest’s long-term thesis for Bitcoin as a superior store of value.

Wood also addressed the rise of stablecoins, which some argue have usurped Bitcoin’s utility in emerging markets for transactions. She characterized this as a superficial substitution, relevant only to the “payments-layer” or “the equivalent of a checking account.” For the critical “savings-layer,” Wood was unequivocal: “When they want real savings, they’re going to buy Bitcoin, we believe.” This distinction reinforces her view of Bitcoin as a long-term savings vehicle, a role she believes will be bolstered by an “intergenerational wealth transfer” favoring digital assets. It is within this framework that she reaffirmed ARK’s ambitious bull-case price target of $1.5 million for Bitcoin by 2030.

Wood pushed back strongly on the idea that Bitcoin has “lost its mojo” because gold has outperformed in recent years. She presented a key statistical rebuttal: “Bitcoin and gold are not correlated. We did the analysis […] the correlation […] is as close to zero as you can get.” She added a cyclical nuance, noting that in the last two market cycles, gold led before Bitcoin caught up, implying the current divergence may be part of a familiar pattern rather than a permanent decoupling.

To explain Bitcoin’s recent struggle to sustain momentum, Wood pointed to a specific, disruptive event: a “flash crash” on October 10 tied to a software glitch at crypto exchange Binance. This triggered an “auto-deleveraging cascade” where “people were just […] margin called to the tune of about 28 billion dollars.” She argued that because Bitcoin is “the most liquid of all crypto assets,” it becomes “the first margin call” during broad market stress, serving as the primary source of forced selling. Wood suggested this massive deleveraging overhang is “just now washing through the system,” potentially clearing the way for a recovery.

At the time of the interview, Wood expected Bitcoin to “hold in the 80 to 90,000 range” barring a major geopolitical shock, specifically mentioning tensions in Iran. “Unless all hell breaks loose in Iran […] then maybe we’ll see the store of value come back for Bitcoin,” she added, acknowledging that extreme macro uncertainty could still benefit perceived safe havens. Her comments preceded a dip that saw Bitcoin fall to $74,600, but her core thesis remains anchored in the long-term comparative fundamentals between an extended gold market and a Bitcoin market she believes is emerging from a forced-selling cleanse.