Ark Invest founder and CEO Cathie Wood has been vocally bullish about the U.S. economy despite troubling economic data.
Wood on Dec. 5 cleared air on inflation, housing and her outlook on Bitcoin versus gold. For context, Wood is one of the most influential tech and crypto investors in the world, best known for making bold, early bets on Bitcoin, Tesla, AI and genomics.
She founded ARK Invest, a major U.S. investment firm focused on high-growth innovation sectors. Her calls shape how Wall Street views the future of technology and digital assets.
Even so, she argued that stronger real growth and productivity, not more rate hikes, are what will bring price pressures down:
“Many people assume that growth means inflation. That’s absolutely wrong. If you look at the 45 years with the exception of COVID, the 45 years since inflation peaked in the early 80s, when real growth has picked up, inflation comes down, mostly because of productivity gains.”
She argues:
When the economy grows because of technology (blockchain, AI, robotics, automation, etc.)
Businesses can produce more with fewer costs
That pushes prices down
Meaning inflation falls, not rises
As Peter Schiff and Binance founder Changpeng Zhao (CZ’s) clash over Bitcoin and gold set crypto social media buzzing again, Cathie Wood has stepped in with her own take on how the two assets stack up.
Using a chart of gold relative to the money supply (M2), she noted that the ratio “really is as high as it’s ever been except for the Great Depression,” a time when the money supply was actually shrinking and the dollar was devalued against gold. Today, by contrast, money growth has turned positive again.
She argued many gold buyers are still positioned for a delayed inflation wave from the COVID-era liquidity surge, but history shows that gold can fall hard once inflation fears fade.
Cathie Wood compared today’s environment to the early 1980s, when gold collapsed after peaking.
She said:
“In 1980 gold peaked at $850… and over the next five years… it dropped 67%. Why was that? It was because Reaganomics was working and investors decided to focus on the equity market and the bond market… The dollar became very strong. The dollar became better than gold.”
She added, “..so yes, the gold price can go down. And we think we are moving into more than a Reaganomics market. We think this is Reaganomics on steroids, based on, especially on the tax cuts.”
Reaganomics refers to the economic policies of U.S. President Ronald Reagan in the 1980s. They were built on four big pillars:
• tax cuts
• deregulation
• tight monetary policy (initially)
• increased spending on defense
“We would not be surprised to see something like that happen during the next four to five years.” Wood added.
She expects Bitcoin to outperform as liquidity improves and fears around inflation give way to concerns about deflation and productivity shocks.
Addressing the recent drawdown, Wood said the “drop in Bitcoin… was more severe than we expected,” blaming “liquidity constraints and restraints” over the last couple of months. But she closed on a familiar bullish note:
“If we are right, we believe that the Bitcoin to gold ratio will resume its uptrend, especially if what I said when talking about the gold to M2 chart is correct.”
In simpler words, Bitcoin will outperform gold long-term.
Bitcoin slipped to $88,841 today, extending its pullback from the recent highs near $126,000.
Over the past week, Bitcoin has fallen slightly against gold, with the BTC/XAU chart down 2.49%. The one-year picture is more dramatic. Bitcoin has surged in dollar terms but still underperformed gold by 44.22% on a relative basis.
However, the long-term chart tells a very different story. Across five years, Bitcoin has outperformed gold by 114.80%, and on a full-cycle horizon the BTC/XAU ratio remains up an extraordinary 5,341.58%.
On policy, Wood said both fiscal and monetary levers are tilting toward easing and that “if this administration want the economy to be in really good shape by the time of the midterms, they really have to start providing the liquidity now.”
Economically, she described the past few years as a “three year rolling recession.”
Housing, which she called “very weak,” could be “the biggest surprise in the next year,” helped by lower rates and price cuts on new homes to clear high inventories.
She said the odds of a Federal Reserve interest-rate cut on December 10 are “80–90%.” That means she expects the Fed to start lowering rates imminently.
Wood pointed out that pro-crypto Kevin Hassett is currently the “top probability” to become the next Fed Chair.
