Cathie Wood remains optimistic about the prospects of high-risk technology innovation stocks and crypto assets going into 2024.
The Final quarter of 2023 has smiled on Cathie Wood’s Innovation Ark fund, which has experienced a recovery as Fed Chair Powell flagged the end of rate hikes in his last December FOMC meeting of the year.
Cathie Wood’s Ark fund has nearly doubled from its 52-week low and ends the year at a yearly high above 20 USD.
Meanwhile, on the flip side of the coin lies AXS Short Innovation Daily ETF, a short fund betting against ARK, which is at a 52-week low.


“Cathie Wood’s Ark fund has nearly doubled from its 52-week low and ends the year at a yearly high above 20 USD”
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As cryptos go mainstream, Cathie Wood remains optimistic about the 1.6 trillion dollar crypto market
“We are getting ready for the SEC’s approval of a spot Bitcoin ETF.
We think it is going to happen. There are all kinds of signals that it will happen,” said Cathie Wood.
Bitcoin ETF approvals could be as early as January 8. However, there could be a delay of more than a month before the launch.
“Bitcoin has been the best-performing asset this year,” she said.
Bitcoin started 2023 below 17K USD and has more than doubled in twelve months as it emerges from its latest two-year bear market.
There is a lot of speculation about how high Bitcoin could go when the SEC approves a spot Bitcoin ETF.
The crypto space is going mainstream as the market emerges from the FTX fraud scandal, the worst fraud exchange in history.
SEC claims that a Bitcoin ETF aims to protect against fraud and manipulation. But SEC regulation of exchanges, the likes of disgraced FTX, would have helped prevent fraud.

“There is a lot of speculation about how high Bitcoin could go when the SEC approves a spot Bitcoin ETF”
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Moreover, those holding the private keys to their crypto asset have custody without third-party counter risk. In this case, there is no intermediate between the investor and the asset.
The decentralized nature of Bitcoin makes manipulation unlikely.
“You can see where other asset classes like stocks and bonds have been.
It has been a good year for Bitcoin because we learned that Bitcoin is not just a risk-on asset. It is also a risk-off asset,” she said.
“It is a risk-off asset because there is no counterparty risk. When everyone was worrying about cash deposits in the banking system in March, they were worried because of counterparty risk,” she said.
“Banks are opaque, whereas Bitcoin blockchain is transparent” – Cathie Wood
Cathie Wood remains optimistic about cryptos because of their unique characteristics
“Banks are opaque, whereas Bitcoin blockchain is transparent, and it is decentralized where banks appear to be centralized.
The realization that Bitcoin is a risk-off and risk-on asset is crazy. We don’t have many of those,” she said.
“We are index agnostic. We think sectors are converging as technology is blurring the lines between and among them,” she added.
Real estate industrials and financials have been the best three categories.
“It was a good year for innovation-based strategies like ours, which are index agnostic, which typically isn’t the case when real estate, industrials and finance are the best categories,” she said.
Worse were consumer staples and healthcare.
“There has been a good rebound from the lows in October,” said Cathie Wood.
“with a 24-fold increase in interest rates from O.25 to 5% in a little more than a year, has been slaying a dragon” – Cathie Wood
Lower inflation and slower growth is the theme Cathie Wood remains optimistic about technology and innovation
“If we are right, inflation will surprise on the low side of expectations and growth disappoints. We will be in a period where innovation does its best. Innovation solves problems. If you need to protect your margins as your pricing power disappears, then you need productivity-enhancing technology,” said Cathie Wood.
With the breakthroughs in AI, as training costs drop 70% in a year, there is a boom out there, which is what happens when prices drop.
Prices associated with disruptive technologies always fall. So, it is a perfect environment for our companies to thrive,” added Cathie Wood.
Growth GDP expectations have been coming down since October. Bloomberg expectations were low, and now they seem to have come up.
“But they are converging into the 1 and 1.25 % range, which is very low and not too far from negative, which is where we would not be surprised to see GDP growth sometime next year,” said Cathie Wood.
Wood noted that consumer sentiment is depressed by historical standards. We did get a little pop recently.
“We have been hovering in the 60 to 70 range, closer to 70 recently,” she said.
She expects consumer sentiment to recover slowly as inflation and interest rates peak. Talk that the Fed is done hiking is already lowering mortgage rates from their peak.
She believes inflation rate expectations will fall to 3%, which is not too far from where we have been.
“The Fed has been fighting this inflation dragon. You’d think inflation expectations would be where they were in the 1980s and had been building for 15 years. We got to 10% inflation expectations then. We got nowhere near that, and the Fed, with a 24-fold increase in interest rates from O.25 to 5% in a little more than a year, has been slaying a dragon,” she said.
“We think we will see ramifications of this policy during the next year or so in the form of much weaker-than-expected inflation and economic statistics.
We would not be surprised to see the broad-based inflation gauges go negative. Of course, then the Fed will be fighting a different battle,” she said.
She sees a decline in temporary employment and believes consumption will pull back.
Cathie Wood remains optimistic, believing billions of dollars sidelined will flow into assets in 2024
Wood believes institutional money will flow into the crypto space, which could fuel ATHs within the next three months.
“Bitcoin is relevant as a hedge and a protection against currency devaluation,” she said.
Cathwood’s focus has been the growing crypto legislation in the House, signalling wider acceptance of cryptos into the mainstream.
She believes decentralized finance will take over, offering lower rates to borrowers and high rates to savers.