ARK Invest founder and CEO Cathie Wood said more local banks could go bankrupt if the ongoing banking crisis in the US is not resolved.

Reflecting on the factors behind the shutdown of Silicon Valley Banks and Silvergate over the weekend, Wood said it was the Federal Reserve’s responsibility to address the issue. By focusing on lagging indicators, he warned, the Fed could steer away from the root cause of the problem: economic deflation caused by an inverted yield curve.

If more local banks fail, the U.S. banking system will become more centralized, she said, adding that nationalization of the banking system is also a plausible risk.

The collapse of three major banks focused on cryptocurrencies and technology only cemented Wood’s optimism about cryptocurrencies.

she Said Neither she nor the rest of the team overseeing crypto investments at ARK are surprised by the current crypto market recovery.

Markets took a hit earlier this week as rumors of a possible bankruptcy of Silvergate shook investor confidence. After falling below $20,000 and trailing the rest of the market, bitcoin rebounded to $22,000 and news about the signing banks was released late Sunday night. Ethereum and other altcoin markets followed suit, setting precedent. Posted an uncharacteristic return in the wake of a market turmoil without a breakthrough.

Wood believes that the blockchain network on which Bitcoin and Ethereum are based has recovered because it is decentralized, transparent, and auditable.

“Banks are not and have stopped being so in the last few days,” she said. “Regulators have focused investors on the threat cryptocurrencies pose to users, but that theory was turned upside down this weekend.”

It should come as no surprise that Kathy Wood is confident in the cryptocurrency market.

Wood endorsed her investment throughout 2022, even after suffering heavy losses across much of ARK’s cryptocurrency portfolio. increased its investment in ARK’s ETFs despite the collapse of its high technology portfolio.

By Jules

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