ARK Invest CEO and staunch Bitcoin bull, Cathie Woods, believes the cryptocurrency asset class will form a balanced 40/20/20 portfolio with stocks and bonds.
In in interview with CNBC, Wood went on to state that Bitcoin is currently closely correlated with the housing market, in spite of comparison with the S&P500 since the turn of the month.
Typically, balanced portfolios comprise of 60% stocks and 40% fixed income on bonds. Woods now believes that half of the allocation for bonds will be focused on cryptocurrencies.
“We think as [cryptocurrency] becomes a better accepted new asset class… We do think it will behave, actually, I would say more like the fixed income markets, believe it or not,” Wood said.
BTCUSD/S&P500 chart by TradingView
“If you think about bonds from this level, this idea of a 60-40 balanced portfolio is a bit problematic,” She added. “We’ve been through a 40-year bull market in bonds. We would not be surprised to see this new asset class become a part of those percentages. Maybe 60 equity, 20, 20.”
ARK’s largest holding is Tesla, however it’s worthing noting that the TSLA share price has tumbled dramatically since it announce a $1.5 billion Bitcoin investment in January.
At the time of writing Bitcoin is trading at $54,700, 6.5% lower than its all-time high that formed in February.
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