ARK Invest CEO Cathie Wood says the approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) in the US will likely have a negative impact on the price of the flagship cryptocurrency.
In a new interview on CNBC, Wood says investors eager to take profits will “sell on the news” of securities regulators giving their approval to the much-awaited investment product.
The sell-on-the-news trading strategy is based on the idea that the price of an asset tends to go up in anticipation of positive news or announcements.
“We had a big anticipatory move here, it wouldn’t be surprising if we saw a sell on the news.”
The price of Bitcoin is expected to go down as holders sell for profit, but Wood says this will be a very short-term phenomenon. She says a favorable decision from the SEC will serve as a green light for institutions that are still holding back and the institutional push will have a significant effect on the price of BTC.
“In our price expectations, going for the biggest contributor is institutions as they move, they don’t have to move very much in. There are trillions of dollars in assets to be allocated. If they just move in 0.1%, forget about 1%, but even 0.1% or 0.2%, that will move the needle especially.”
She says Bitcoin’s capped supply will further drive up the price of the crypto asset.
“The number of Bitcoin outstanding right now is about 19.5 million and the furthest that number is going to go is 21 million, so the scarcity value as institutions move in will begin to move the price, we believe.”
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The post Anticipated Bearish Impact of Potential Spot Bitcoin ETF Approval Likely To Be Short-Term, Says Cathie Wood appeared first on The Daily Hodl.
