Ark Investment Management CEO Cathie Wood on Wednesday argued why investors are considering crypto assets in response to the economic crisis.
What Happened: In a Twitter thread, she noted how, as crypto assets soared during the Silicon Valley Bank meltdown, the administration suggested that equity and bondholders were at risk of being “wiped out”.
Wood explained how businesses and individuals are now taking measures to hedge their fiat assets with crypto assets, resulting in risk reduction and increased returns by moving from “low-yielding bank deposits to higher-yielding money market funds.”
“As a result, now that they can borrow at will from a government facility at ~4.5%, regional banks seem to be moving from a liquidity crisis to a slower-moving solvency crisis,” Wood tweeted.
According to her, Bitcoin
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and other crypto assets appreciated during this banking crisis because they “face no central points of failure: they are decentralized, transparent, and auditable.”