Ark Investment Management founder and CEO Catherine Wood said bitcoin could become the new gold standard as it can increase purchasing power.
In series records On Twitter, Ark Investment Management founder Catherine Wood noted that advancing technological innovations today – genomic sequencing, robotics, energy storage, artificial intelligence and blockchain – are eclipsing innovations in the late 1800s and early 1900s.
The technologically-enabled innovation evolving today dwarfs that of the late 1800s/early 1900s: genomic sequencing, robotics, energy storage, artificial intelligence, and blockchain technology. Moreover, Bitcoin could be today’s “gold standard”, increasing purchasing power!
— Cathie Wood (@CathieDWood) April 11, 2021
According to her, bitcoin can become the new “gold standard”, as it is able to increase purchasing power. Most countries adhered to the gold standard in the early 20th century, before abandoning it after the Great Depression.
Wood’s Twitter series was in response to concern Tesla CEO Elon Musk on the unusually high S&P 500 to GDP ratio.
Disruptive technologies tend to deflation because of Wright’s Law, Wood said. Rapidly rising productivity increases profits, while near-zero interest rates are pushing the S&P 500 much higher. Wood noted that at the beginning of the 20th century, the stock market was three times the GDP. She wrote:
“Technology platforms are deflationary through learning curves or Wright’s Law. The gold standard was also valid. As deflation put pressure on the increasingly difficult-to-measure nominal GDP (denominator), exponential unit growth and rapid productivity growth boosted the quality of profits, while low interest rates boosted their capitalization (numerator). ”
In March, Catherine Wood warned US BTC holders against converting cryptoassets into fiat currencies before tax legislation changed and said that a $ 1 trillion capitalization for Bitcoin is just the beginning.
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