Cathie Wood, Founder, CEO, and CIO of ARK Invest, recently took to Twitter to discuss the relationship between crypto assets and the recent banking crisis.
In her tweet, Wood suggested that businesses and individuals are turning to crypto assets to hedge their fiat assets and that this shift is causing regional banks to move from a liquidity crisis to a slower-moving solvency crisis.
Wood argued that, against the backdrop of depressed interest rates on long-term assets purchased during the coronavirus crisis, banks are borrowing at around 4.5% to plug deposit outflows, causing net interest losses and lower earnings that will erode their equity and threaten their future. She went on to suggest that if deposits do not flow back to regional banks, M2 growth is likely to accelerate further into negative territory, putting significant stress on both commercial and residential real estate.
Twitter: @azcoinnews
Wood also argued that crypto assets such as Bitcoin have appreciated during this banking crisis because they face no central points of failure, are decentralized, transparent, and auditable. In her view, crypto assets provide “insurance” against the possibility that the Fed and regulators have made policy mistakes that threaten our well-being.
Wood’s tweets come at a time when the relationship between crypto assets and traditional banking is under increased scrutiny. The recent banking crisis has highlighted the potential benefits of crypto assets, such as their decentralization and transparency, but it has also raised concerns about the risks associated with these assets.
Regulators around the world are currently grappling with how to regulate crypto assets in a way that ensures investor protection while also promoting innovation and growth in the industry. Wood’s tweets suggest that regulators should not deprive US citizens of access to crypto assets and should instead recognize their potential as a form of “insurance” against policy mistakes that threaten our financial well-being.
While the debate over the role of crypto assets in the banking system is likely to continue, Wood’s tweets highlight the growing interest in these assets and their potential to reshape the financial landscape in the years to come.
#CathieWood #ARK #Bitcoin #crypto2023 #azcoinnews
This article was republished from azcoinnews.com
