Cathie Wood Accuses US Regulators Of Denying Citizens’ Access To Crypto Assets

Key Points:

• Ark Invest CEO Cathie Wood accused the U.S. regulator of stripping U.S. citizens of access to crypto-assets, instead encouraging bank deposits.
• In the context of the Fed rate hike, banks are currently borrowing at around 4.5% to offset the outflow of deposits, causing net interest loss and lower income, eroding equity.
• Cathie Wood thinks bitcoin and other crypto assets are prized during the banking crisis because they are decentralized, transparent, and auditable.

In a recent tweet by Ark Invest CEO, Cathie Wood shared her views on why U.S. regulators are consistently blocking citizens from accessing crypto assets while they are transparent and auditable.

In the sharing, Cathie Wood spoke of the central banking crisis skyrocketing after the collapse of Silicon Valley Bank. The administration had suggested that investors in regional banks should be prepared to be “wiped out” after the Fed funds rate increased to an unprecedented 20 times.

It is a fact that businesses and individuals are now hedging their fiat assets. Still, they also reduce risk and increase returns by moving from low-interest bank deposits to money market funds. High-interest rate, it’s a win-win. Local banks, now free to borrow from the government at 4.5% interest, appear to be moving from a liquidity crisis to a solvency crisis.

Earlier, the CEO of Ark Invest predicted that Bitcoin’s strength during the recent banking crisis would bring institutional investors who regulators have pushed away from centralizing their investments to pay attention to bitcoin on their balance sheet.

Bitcoin is up almost 70% this year and 21% this month as small crypto-friendly banks like Silvergate and Signature have been lost along with Silicon Valley Bank. Even mainstream banks like First Republic and Credit Suisse were hit hard enough to require a significant rescue.

This has led Cathie Wood to question why U.S. regulators prevent access to crypto assets when they are decentralized, transparent, and auditable.

Cathie Wood’s famous hedge fund ARK has had a stellar 2023 so far, with shares trading 30% higher than at the start of the year. But that barely offset Wood’s massive corporate loss in 2022 blamed on the Federal Reserve.

The Fed has raised interest rates eight times in the past year and is likely to raise rates as the central bank continues its war on inflation. Rising interest rates have made access to consumer and business loans more expensive. Tech stocks have been hit hard, but it’s the high-growth stocks with huge valuations. Therefore, the companies that represent the primary source of Wood’s ARK fund are hit the hardest.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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