Cathie Wood Looks To On-Chain Indicators To Confirm Bull Market

Something fundamental has changed in the SEC's treatment of ETF applicants, Wood says.

Wood also suggested that Gary Gensler had political motives for delaying the ETF.

In a wide-ranging interview with CNBC, Ark Invest founder Cathie Wood explores various aspects of Ark's strategy and the outlook for bitcoin and cryptocurrencies. In particular, she suggests that Bitcoin is in a strong bull market, based on on-chain metrics, and that something fundamental has changed in the SEC's treatment of a spot bitcoin ETF.

Flight To Safety

Wood characterizes interest in BTC as a "flight to safety", similar to Larry Fink's recent comment about a "flight to quality". While quality is accurate, the idea of safety is more apt, argues Wood, because there is no counterparty risk with Bitcoin. She also believes that bitcoin will outperform equities related to Bitcoin and crypto.

Optimism around approval of an ETF is well-founded, because regulators are finally engaging with applicants in a way they have never done before. "The SEC actually asked us questions", she says. "Whereas before, our filings were just rejected out of hand."

The SEC, she says, has a good understanding of the technology, and she confesses to being impressed at some of the questions the regulator's researchers have asked in the course of their discussions. SEC Chair Gary Gensler, too, understands Bitcoin extremely well, having taught about it at MIT.

Wood also speculated that Gensler might be delaying approval of a spot ETF as part of a political play to become the next Treasury Secretary. It cannot be down to ignorance, or misunderstanding about Bitcoin: Gensler is well aware of the potential and implications of decentralized money.

Outstanding Network Health

In terms of on-chain metrics, Wood says that the Bitcoin network is "almost as good as it gets", indicating a strong bull market is in process.

Ark's monthly network report surveys a number of different technical and on-chain factors, and the current outlook (October report) is extremely promising, with most factors now flashing bullish.

Screenshot from Ark Invest Bitcoin network monthly report.
Network health and revenues are strong.

Similarly, key metrics and technical indicators reflecting current market health are good.

Ark's report also notes that government statistics do not appear to be capturing how weak the US economy really is—the one cause for concern in the document.

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