In a recent interview with Yahoo Finance, the founder, CEO and CIO of Ark Capital (a global asset investment group), Cathie Wood, refuted claims by skeptics like John Paulson that the cryptocurrency market is just a short-term gamble and a bubble that will inevitably burst.
When host Brian Sozzi asked Cathie Wood to comment on skepticism about the cryptocurrency market from people like Paulson, Wood said:
A lot of people ask me: Are we in a bubble
? We couldn’t be further from that. Sponsored Sponsored
Continuing her statement, she suggests that those who bet against cryptocurrencies do so out of ignorance rather than diligence, she added that:
I don’t believe that investors, average investors, so to speak, understand how provocative the next five to 15 years will be.
‘The provocative nature of this not-too-distant future to which Wood refers is the rate at which the cryptocurrency and blockchain sectors are evolving in terms of innovation and industry. Citing the likes of Coinbase as an example of innovation in this space. She also touched on Robinhood
as a traditional industry player that has successfully implemented cryptocurrencies at its site. <img src=”https://yellowrocketagency.com/wp-content/uploads/2021/09/hqdefault..jpg” alt=”We couldn’t be further from’ a market bubble: Cathie Wood” /></a> <h2>Cathie Wood refutes John Paulson’s “cryptocurrency bubble” theory</h2> <p>Cathie Wood’s remarks follow an earlier interview with prominent investor and short-seller John Paulson. It was conducted by David Rubenstein of Bloomberg Wealth on September 1. In the interview, Paulson discussed what he considers to be <a href=”https://www.bloomberg.com/news/videos/2021-09-01/bloomberg-wealth-with-david-rubenstein-john-paulson-video”>a lack of profitability</a> with regard <a href=”https://beincrypto.pl/learn/najlepsze-aplikacje-do-inwestowania/” target=”_blank” rel=”noopener”>to investing</a> in the cryptocurrency market.</p> <p>According to Paulson, the cryptocurrency market is a “bubble” with a “limited supply of nothing.” Because he believes that cryptocurrencies have “no intrinsic value,” concluding that he “would not recommend anyone invest in cryptocurrencies.” In addition to these comments, Paulson further shook up the cryptocurrency investment market. He stated that cryptocurrencies have “unlimited downside” and are “too volatile to short” – likening investing in cryptocurrencies to a “get-rich-quick-scheme”.</p> <p>John Paulson is a multi-billionaire hedge fund manager who runs the New York investment management firm Paulson & Co, which he co-founded in 1994. Paulson is known for being the author of the lauded prtestify to critics of the book “The Greatest Trade Ever: The Behind-the-Scenes Story of How John Paulson Defied Wall Street and Made Financial History,” which chronicles how Paulson raked in more than $15 billion. USD in 2006 by betting massively against the housing bubble and winning.
Relying on indexes
His comments point to what Cathie Wood describes as an overly risk-averse, “benchmark-sensitive” generation of baby boomer investors who over-rely on the statistics provided by indexes such as the NASDAQ as a result of surviving several significant bubbles such as the dotcom bubble and the 2008-2009 crash.
According to Wood, the problem is that those who rely solely on these indexes to inform their investment decisions are losing out on key emerging and innovative markets that such indexes simply don’t cover, such as blockchain and cryptocurrencies:
Guess what? Many innovations that are about the future are not captured by indexes. In fact, very few of them, in our view, are captured by indexes.
And he adds that:
We are in a period of explosive innovation… Never in history have we been in a period where we have five major innovation platforms spanning 14 different technologies, all moving in s-curves… as these s-curves feed off each other [they will] enter exponential growth trajectories that we have never seen before.
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