ARK Invest CEO sees potential crypto rebound amid whiffs of a Fed pivot

Cathie Wood, head of the crypto and innovative tech investment firm, is confident that inflation will fall and that the Fed will pivot in 2023.

The chief executive from crypto and tech investment firm ARK Invest believes crypto assets will see a huge turnaround this year as inflation falls and the Fed pivots. 

In a company video blog on Jan. 23, ARK Invest CEO and chief investment officer Cathie Wood began with an overview of the macroeconomic outlook. She said there was all kind of signals pointing to lower inflation, which “suggests that the Fed should pivot soon.”

This would be beneficial for risk-on assets such as crypto as the macroeconomic outlook improves and financial belts are loosened.

She added that the firm believes inflation will come down to the 2% Fed target level. However, Wood predicted that inflation could fall below this level and even into negative territory because the money supply has been falling.

The market is waiting for a signal from the Federal Reserve, she said, adding that “we think that will come in the first half of 2023.” She said that ARK Invest’s portfolios should do very well if interest rates are about to fall below expectations.

ARK has a crypto asset fund, blockchain venture investments, a disruptive innovation fund and six active technology and fintech-based exchange-traded funds (ETFs).

Meanwhile, ARK Chief Futurist Brett Winton spoke about artificial intelligence (AI), noting that advances would accelerate in 2023. He also predicted that crypto assets would see a big turnaround this year.

“Public blockchains, cryptocurrencies and crypto assets which are going through a bumpy period right now are going to become even more differentiated for their scarcity in an age of abundance.”

He added that when there is a turn in the macro environment and the Fed “changes its spots,” the opportunity for “expansion and value realization within the venture and public market space is even larger.”

Related: Cathie Wood’s ARK enters 2023 with $5.7M Coinbase stock purchase

Wood concluded that these technological innovations are deflationary, which will “cause a boom in the products and services associated with this innovation.”

ARK Invest’s most recent move was to take profit on some of its Grayscale Bitcoin Trust (GBTC) holdings and load up on 320,000 Coinbase (COIN) shares, worth around $17.6 million.