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Founder of Ark believes undervalued inflation stickiness, optimistic about NFT development, algorithmic stablecoin collapse is very reasonable

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Founder of Ark believes undervalued inflation stickiness, optimistic about NFT development, algorithmic stablecoin collapse is very reasonable

Ark Invest CEO admits underestimating the severity of inflation, but believes that the greater risk facing the U.S. now is deflation. As for the crypto market, she is impressed by the resilience of the DeFi ecosystem post Terra's collapse, criticizes algorithmic stablecoins, and is optimistic about the future status of NFTs as digital assets.

Underestimating Inflation Stickiness

Cathie Wood admitted on CNBC interview that she underestimated the severity and persistence of inflation, and the significant overstocking of corporate inventory is a bigger issue. She has never seen such a substantial increase in corporate inventory in her 45-year career.

Major retailers known for their effective management, including Walmart, Target, have acknowledged the significant increase in inventory. Cathie Wood believes this indicates that future disruptions in the supply chain will further exacerbate.

After hitting a new high in February last year, Ark Invest's flagship active fund, the Ark Innovation ETF ARKK, has plummeted by 73.5% to date, with a 56% decline in just the first half of this year.

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Despite this, she emphasized the continued influx of funds, with their users continuing to move away from indices like the Nasdaq 100 in diversified investments. FactSet data shows that inflows into ARKK in June have exceeded $180 million.

Why So Bullish on Coinbase?

The host first asked about the news of FTX discussing the acquisition of commission-free trading platform Robinhood, whether this will put pressure on Coinbase, one of Ark's top ten holdings?

Wood explained that their Robinhood holdings are only slightly above 2%, and aside from quoting "Big Ideas" praising Bitcoin and Ether as representatives of decentralized monetary systems, the revolution around crypto currencies will not stop, but she also raised some concerns:

Some DeFi protocols have excessively high interest rates and leverage, and as an economist, I cannot comprehend algorithmic stablecoins. It is entirely reasonable that Terra's collapse is expected to trigger a chain reaction, we have seen some liquidation events, but the DeFi ecosystem led by Ethereum is still doing very well.

When discussing NFTs, Wood believes in the future digital property status of NFTs and the various applications they offer to creators, but just as with DeFi and cryptocurrencies at their inception, she cannot be sure of what the future holds for NFTs.

As for betting on Coinbase, she believes that the application of digital wallets is crucial, but she is unsure who will emerge victorious, whether it will be winner-takes-all or a multi-party competition? Will FTX and Robinhood become dark horses? She cannot predict, which is why COIN and BLOCK Cash App are both among Ark's top ten holdings.