Cathie Wood calls bitcoin good source of diversification for investors seeking higher returns

But Ark Invest CEO Cathie Wood said Bitcoin could be playing an increasingly important role in institutional portfolios, saying the asset was ‘a valuable diversification tool’ for her 2026 market outlook.

Wood pointed to the low correlation of bitcoin, which is a key asset class (gold, equities and bonds), as ‘the reason that asset allocators should take it seriously’ in.

But she wrote ‘It’s a good source of diversification for asset allocators looking for higher returns per unit of risk.

But Wood argued that since 2020, bitcoin has had lower price correlations with stocks, bonds and even gold than those assets have with each other. Similarly, bitcoin’s correlation to the S&P 500 with its partner was 0 for example. 28 as compared to the one with zero. The S&P 500 versus real estate investment trusts 79, meaning that bitcoin is relatively better bet because it has low correlation with other assets.

Asset correlations (Ark Invest)

But for large institutional investors who manage risk-adjusted portfolios, this could open the door for bitcoin to be more than a speculative play on bitcoin.

Nevertheless, the bullish comments of Ark Invest CEO came at a time when Jefferies strategist Christopher Wood did ‘complete 360′ on his bitcoin recommendations for investors’ portfolios Friday.

His call for a 10% stake in bitcoin was deleted and replaced with gold instead of bitcoin, he said. The bitcoin-addicted to his model portfolio in late 2020 and increased exposure to 10% in 2021, Jefferies Wood said advances in quantum computing would eventually weaken security of the Bitcoin blockchain and, by extension, its popularity as a long-term store of value.

Jefferies was more bearish on bitcoin’s exposure, but Caitie Wood’d call matches what other big financial institutions have been saying recently. In addition, Morgan Stanley’s Global Investment Committee recommended “opportunistic” allocation of up to 4% in bitcoin; and Bank of America approved wealth advisors for suggesting an approach similar to the one that is widely supported by many other financial institutions.

The portfolio staple of BTC was also cited by CF Benchmarks as being conservative, and that “a better return on investment is more diversification.” At the same time, Brazil’s biggest asset manager Ita Asset Management said it would be a small stake to bitcoin as ‘protect against FX and market shocks.

Read more: Bitcoin price may hit $300,000 to $1.5 million by 2030, Ark Invest Says

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