ARK Investment Management CEO Cathie Wood noted that institutional adoption of Bitcoin will continue to grow, especially from tech companies that “get” Bitcoin.
The price of Bitcoin (BTC) It has been boosted in recent months by growing interest and institutional adoption, by large companies that have begun to invest several billion dollars in this cryptocurrency. The boost from institutional adoption strengthened investment confidence in Bitcoin, which at the end of 2020, and during the first two weeks of 2021, demonstrated a simply exceptional performance. The value of this cryptocurrency went from about $13.700 USD by mid-October, almost $42.000 USD in the first week of January; with a return of more than 200% in the last 3 months.
Source: CoinGecko.
However, Bitcoin is currently experiencing a correction in its value, which has fallen to $32.000 USD per unit at the time of this writing; and has even reached the $28.000 USD level again. The recent corrections, although they may seem negative for the cryptocurrency, and for many of the new users, are pointed out as “healthy” by many experienced investors, who claim that these will make its value consolidate at a level, and then lead to a new upward trend.
In the case of Cathi Wood, the CEO of ARK Investment Management said during a interview that in the near future “We will hear about more companies putting this coverage on their balance sheet,” referring to bitcoin as a store of value asset. Wood says that many more companies will follow the example of Square and MicroStrategy, and transform part of their cash hoards into this cryptocurrency to protect its value.
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Companies that “understand” Bitcoin
For Wood, the companies and businesses that will continue to adopt Bitcoin as a reserve asset are, first and foremost, those dedicated to technology and innovation, since these companies “understand” the technology that cryptocurrency represents and “feel comfortable with it.” The executive believes that, in particular, these are the companies that will load their balance sheets with bitcoins.
During the interview with Yahoo Finance, Wood also highlighted the fact that Marathon Patent Group, which recently made a significant investment in Bitcoin. Wood noted that Marathon is one of the companies that, by its nature, is best suited to understand the nuances of bitcoin technology and blockchain. This company is dedicated to Bitcoin mining, and made a recent purchase of 4.812,6 BTC, in which he invested 150 million dollars, taking advantage of the fall in the value of this cryptocurrency.
However, Wood also stressed that Marathon's feat may prove risky for other inexperienced companies looking to convert part of their treasury reserves into BTC, but who may be currently harmed by the volatility of Bitcoin's price on the markets.
Bitcoin in DeFi
The prominence that Bitcoin is acquiring in decentralized finance ecosystems (DeFi) is also growing. At the time of this writing, the Bitcoin token on Ethereum, known as Wrapped Bitcoin o WBTC, which helps BTC users participate within DeFi protocols, has a market cap of almost 4.000 million dollars, according to data from DeFiMarketCap.
The volume of bitcoins moving within DeFi is also a factor attributed to the growth in Bitcoin's value in the markets; in addition to institutional adoption and investment.
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