Opinion: Bitcoin could replace bonds in investment portfolios

In the future, Bitcoin will resemble low-risk instruments such as bonds and enter the recommended investor portfolio. That was said by Cathy Wood, the head of ARK Investment Management.

“This will happen as Bitcoin becomes a more acceptable asset class. I think the first cryptocurrency will behave like fixed-income markets,” Wood said.

She asserts that, at present, Bitcoin’s price is most correlated with real estate prices.

In the future, according to Wood, Bitcoin will not only stabilise its price but also enter the recommended portfolio for the average investor, consisting of 60% equities and 40% bonds.

“We have endured a 40-year bull market in bonds. We won’t be surprised if this new asset class becomes part of an investment portfolio. It could be 60% stocks, 20% bonds, and 20% cryptocurrency,” Wood said.

Noted Bitcoin critic Peter Schiff called Wood’s statement “outrageous”.

.@CathieDWood claimed #Bitcoin is most correlated with real estate now, but in the future will correlate with bonds, with Bitcoin taking a large slice of portfolio bond allocations rather than equity. She wins the award for most outrageous, unchallenged Bitcoin comment on @CNBC.

— Peter Schiff (@PeterSchiff) March 8, 2021

“Cathy Wood asserts that in the long run, Bitcoin will correlate with bonds and allegedly partially displace them from investment portfolios. This is the most outrageous and unequivocal Bitcoin comment on CNBC”.

Earlier in January, Cathy Wood forecast that more and more companies would invest in Bitcoin to hedge inflation risks.

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