The chief executive officer of the cryptocurrency and technology investment business ARK Invest predicts that this year will see a significant shift in the value of crypto assets due to a decline in inflation and a shift in monetary policy by the Fed. Cathie Wood, CEO of ARK Invest and Chief Investment Officer, provided an assessment of the macroeconomic forecast in a video blog post for the firm that was published on January 23.
She said that there were several signs pointing to reduced inflation, which "suggests that the Fed should pivot shortly." She was referring to the recent pivot that the Fed made.
As the macroeconomic outlook improves and financial constraints are eased, this would be positive for risky assets such as cryptocurrency.
She also said that the company anticipates inflation would decrease to the 2% goal level set by the Fed.
Nevertheless, Wood anticipated that inflation may go below this level and perhaps into negative territory since the money supply has been declining. This is due to the fact that the money supply has been falling.
She said that the market is now awaiting a signal from the Federal Reserve, and she went on to say that "we expect it will happen in the first half of 2023."
She said that the portfolios that ARK Invest manages ought to perform rather admirably in the event that interest rates are set to fall below forecasts.
ARK operates not just a cryptocurrency asset fund but also a blockchain venture investment fund, a disruptive innovation fund, and six active exchange-traded funds that are centred on technology and fintech (ETFs).
While this was going on, ARK Chief Futurist Brett Winton was discussing artificial intelligence (AI), and he said that advancements in this field will speed up in 2023.
Additionally, he predicted that crypto assets will see a significant change for the better this year. " Public blockchains, cryptocurrencies, and crypto assets, all of which are going through a turbulent moment right now, are likely to become even more distinguished due to their scarcity in an era of plenty."
He went on to say that whenever there is a shift in the macro environment and the Federal Reserve "changes its spots," there is a greater possibility for "growth and value realisation inside the venture and public market area."
Wood came to the conclusion that the recent technical advances will lead to deflation, which in turn would "create a boom in the goods and services linked with this innovation."
The most recent action taken by ARK Invest was to realise a profit on a portion of its holdings in Grayscale Bitcoin Trust (GBTC) and then load up on 320,000 shares of Coinbase (COIN), which are now valued at around $17.6 million.