Reprint: Mars Finance, Daisy
Host: Jennifer Sanasie
Guest: Cathie Wood, Founder, CEO, and Chief Investment Officer of ARK Invest
Broadcast time: 2025.8.15
Preface
In the realm of digital assets and innovative finance, market changes often exceed expectations. Cathie Wood is surprised by the rapid adoption of stablecoins and points out in her optimistic predictions that even with the most cautious adjustments, the potential in the next five years still far exceeds expectations. As she described in (Big Ideas 2025), investing in emerging markets and frontier technologies is not only full of opportunities but also requires investors to possess forward-thinking and sharp insights. Through this interview, we will delve into Cathie's investment philosophy, market observations, and how she seizes innovative opportunities in a turbulent financial environment.
One, Starting Out: Cathie's Investment Journey
'We are very surprised by the speed of stablecoin adoption. If we were to make any adjustments to the $1.5 million prediction, you might see how we built this optimistic scenario in (Big Ideas 2025); we might slightly pull from our expectations from emerging markets. I think we can say with certainty that in five years, our optimistic scenario is far more than a million, far surpassing a million dollars.' - Cathie Wood
Jen: Cathy Wood, welcome to CoinDesk Spotlight.
Cathie Wood: Thank you, Jen, I'm glad to be here.
Jen: We are also very pleased to have you. Let’s start from here and review when you first became interested in the market, the financial system, and the importance of innovation.
Cathie Wood: Oh my goodness... When I was in college, I actually had no idea what I wanted to do, so I tried almost everything—engineering, education, geology, astronomy, physics... I tried it all.
Jen: You really are exploring across all fields.
Cathie Wood: Yes, indeed. The reason I delayed taking economics classes was that my father always hoped I would study economics, so I intentionally postponed it until the end. It wasn't until my last semester in my sophomore year at UCLA that I took my first economics course, and I instantly fell in love with it. At that time, I also discovered that UCLA didn't allow me to take many business courses because they only had a graduate business school... So I transferred to USC, where I met Art Laffer.
The details might be a bit much, but that's okay. Art Laffer is a renowned economist, the proposer of the 'Laffer Curve.' He saw my passion for economics and introduced me to Capital Group, which was the largest and possibly most prestigious investment company in Los Angeles at that time.
When I first walked into the company, I knew almost nothing about how the financial world operated. But there, I first felt that economics could closely intertwine with these exciting market activities. More importantly, I realized: 'Wait, our job is to keep learning, and we even get paid for it? That's amazing! We can even use our understanding to deduce how the world operates.'
I started my career at Capital Group when I was 20, and from that moment, I knew I would stay in this industry for a lifetime.
Two, Meeting Art Laffer and Falling in Love with Economics
Jen: What sparked your passion for economics? After all, you tried almost every major before and even had a bit of a rebellious phase against your father.
Cathie Wood: Yes, somewhat. But my relationship with my father has always been good; this kind of 'rebellion' is more typical teenage defiance. The real catalyst that led me to economics was Art Laffer's engaging teaching style.
After I transferred to USC, he would start each class with a joke, bringing us into the classroom atmosphere, and then place the day's topic in the context of the real world, explaining 'why we need to learn this?'. By the end of class, you would find the blackboard already densely filled with formulas.
He always guided us in a very vivid way, while also exposing us to different schools of economic thought: Keynesianism from Harvard, monetarism from the Chicago School. What he promoted at USC was the supply-side perspective, which is even, to some extent, closer to the Austrian School. He wanted us to not only learn the theory but also understand the differences between these frameworks.
This multi-perspective training has been crucial for my entry into the investment industry. In the late 1970s, almost everyone was a Keynesian, even monetarists were considered a 'minority.' Later, I personally witnessed the shift in economic thought towards supply-side during Reagan's presidency. Thanks to my studies at USC, I was well-prepared for the most astonishing bull market in the 80s and 90s.
However, when I first started working in New York, I couldn't openly discuss Laffer's views. The supply-side school has a core assertion that 'when tax rates are too high, tax cuts actually increase revenue,' which was hard to convince people against the backdrop of the economic recession in the early 1980s. At that time, the Fed raised interest rates above 15%, and mortgage rates even exceeded 20%, plunging the economy into a deep recession. In such an environment, I only had the opportunity to express these views more openly a few years later.
Three, on Fed interest rates, economic outlook, real estate, and innovation
Jen: Hearing you share these experiences and your responses, I would like to bring the topic back to the present. When we recorded the program today, the Fed just announced that it would keep interest rates unchanged. I'm curious, how do you view the future interest rate trend?
Cathie Wood: I find today's voting results quite interesting, as there were two dissenting votes. This hasn't happened since 1993, and I remember it clearly because I was also in the industry at that time. This is symbolically significant, as Chairman Powell has always hoped for unanimous votes, and this time there was a divergence.
Part of the reason might be that Powell's term will end next May, perhaps these two members are 'competing' for that position? Who knows? It could also be because they noticed some changes; I haven't read all the meeting minutes yet, but I've already seen that the real estate market is clearly retreating, and many regions' housing prices barely reacted to the tariff increase. They might be thinking: 'Wait, maybe the biggest surprise in the next six months is a significant drop in inflation.'
The recent employment data is a bit 'mixed,' with some indicators strong and others weak. But I noticed that the unemployment rate for recent college graduates is rising, as many entry-level positions are being automated, especially being replaced by AI.
We have always believed that the U.S. economy has been in a 'rolling recession' during this period, with the Fed raising interest rates 22 times over more than a year, crushing one industry after another, starting with real estate. By many standards, real estate is still 35% lower than its peak, and some indicators are again declining sharply.
I expect housing-related inflation to continue to decline. Various monthly data sources have already shown year-on-year declines, although aside from the median price of second-hand homes, a full retreat has not yet occurred. However, if sellers really want to sell their homes and interest rates do not decrease, they will have to lower their prices. Once prices drop, the biggest surprise in the second half of this year may be that inflation falls very low.
It's important to note that the decline in housing prices takes a long time to transmit to the statistical data and then 'disappear' from the data, so this impact will last for a while.
We believe that as uncertainties regarding tariffs, taxes, government spending, and regulation gradually dissipate, the U.S. economy is transitioning from a 'rolling recession' to a stronger recovery than expected. This will be reflected in productivity gains over the next 6 to 9 months. Although the overall economic growth rate is slow, productivity has already exceeded 2% year-on-year, and I believe it will be even higher because the technologies we are focused on—robots, energy storage, AI (especially important), blockchain, and multi-sequencing—have immense productivity enhancement potential.
Most of these innovations are deflationary, with AI being the most typical example. The training costs of AI drop by 75% each year, while inference costs—i.e., the costs of inputting questions and receiving answers in ChatGPT or Grok (which I use more often now)—drop by 85% to 98% each year (with some data from China even reaching 98%). The declining costs will greatly drive the increase in usage.
Therefore, we believe this is 'benign deflation,' unlike the 'bad deflation' of 2008-2009. For companies at the forefront of technology, this is a positive; for companies being disrupted, this is pressure, and they will have to lower prices. We believe the future will enter a world that is more deflationary than most economists and strategists expect.
Four, how the new regulatory environment drives Agentic AI and blockchain innovation
Jen: You just mentioned a 6-9 month outlook. In your envisioned strong recovery, what role will cryptocurrencies play?
Cathie Wood: The shift in the regulatory environment is crucial. We have just experienced a period of hostile regulation led by SEC Chairman Gary Gensler, transitioning to a currently legislative-driven and extremely friendly situation. Now, regulation is guided by legal frameworks rather than 'enforcement-style regulation' that stifles innovation. The past methods forced many innovative projects to leave the U.S., moving to other countries.
The situation is now rapidly improving, especially with David Sacks appointed to oversee both crypto and AI affairs, and the concept of 'Agentic AI' has emerged. Agentic AI refers to AI agents capable of autonomously completing specific tasks such as walking, working, and communicating. Of course, their capabilities have certain boundaries. To operate these AIs efficiently, smart contracts are key, as AI agents need to interact with websites, for example, to purchase certain content or services on CoinDesk, and the payment process requires automated smart contracts to execute. This is precisely the entry point for the fusion of AI and blockchain technology.
Before this, we had already seen a similar revolution in the financial services sector. After the regulatory green light, more and more financial institutions are entering the blockchain space, as they find it can significantly reduce costs.
I like to compare this situation with the early internet in the late 1980s and early 1990s. At that time, developers building the internet hardly thought that financial services or commerce would move online, so there was no native payment layer. It wasn't until today that we truly have this layer due to blockchain. Over the past 30 to 40 years, the absence of a payment infrastructure forced traditional finance to rely on a large number of intermediaries to reduce risks after credit cards went online, resulting in 2% to 3.5% fees being taken from each transaction, which has almost become a 'system tax.'
Blockchain can reduce this 'tax' from 3.5% to about 1% (in Nigeria, it can be reduced from 20% to nearly 1%). We expect the global asset management scale in financial services to reach $250 trillion in five years. If you can reduce costs by 2-2.5 percentage points in such a large market, that would be a disruptive improvement in friction and efficiency.
Cost is just one aspect. In terms of productivity, Agentic AI + smart contracts + API to API automated trading (including micro-trading) will also have similarly profound impacts.
Five, the logic behind ARK's investment in Bitmine regarding Ethereum, Agentic AI, and smart contracts.
Jen: You previously bet on Tom Lee's Bitmine, and ARK is also currently one of the largest institutions holding Ethereum (ETH). Is this related to the Agentic AI and smart contracts mentioned earlier? Do you think Ethereum will become the foundational layer supporting an efficient Agentic AI world?
Cathie Wood: Yes. We have been closely observing which protocols institutions choose to integrate when formulating their digital asset strategies. First, Coinbase chose Ethereum for its second-layer network Base, and recently Robinhood's second layer is also built on Ethereum. We have long had a hypothesis that Ethereum will become an institutional-level protocol. Although Solana significantly outperformed Ethereum for a period, leading many to question our judgment, from the vote (actual deployment) perspective, Ethereum, despite higher transaction costs and slower speeds, is safer due to its greater decentralization; Solana is more likely to excel in consumer-facing applications.
And investing in Bitmine is actually our first opportunity to gain stable exposure to Ethereum within an ETF. There are many issues with directly buying other funds or ETFs, including tax (such as 'bad income' clauses, where if a certain type of gross profit exceeds 10% of the fund's annual profit, it may lose tax benefits or even be forced to close) and layering fees. We cannot bear such risks, so we have always struggled to find a suitable path. Bitmine provides a solution; although there is a premium, the utility of the Ethereum treasury is greater than that of the Bitcoin treasury, such as staking, and ETFs currently cannot stake ETH.
Additionally, we ourselves are cornerstone investors in Circle and have been closely following the explosive growth of stablecoins, with most stablecoin activity occurring on Ethereum. These factors combined have increased our confidence in Ethereum's potential as the foundational layer for Agentic AI, explaining our logic for investing in Bitmine.
Six, the case for Bitcoin surpassing $1 million
Jen: Does this change your view on Bitcoin? I know you predict that Bitcoin will rise to $1.5 million by 2030; has that prediction changed?
Cathie Wood: If you ask me what the biggest surprise of the past ten years is, it was in 2014 when we founded ARK and released the first Bitcoin white paper in 2015. At that time, we believed that Bitcoin would play the role of today's stablecoins in emerging markets. The story of Tether was completely unexpected. Co-founder Paolo told me that they didn't realize until the pandemic hit that Tether would become an important way for emerging markets to gain exposure to the dollar. At that time, children would tell their parents: 'We don't need to go to the black market to exchange dollars today; we can do it directly on the internet.' That was the opportunity for its widespread adoption.
We did not expect stablecoins to replace Bitcoin's role in this area so quickly. If we were to adjust the $1.5 million prediction, we might slightly lower the contribution from emerging markets. But the larger driving forces still come from two points: first, Bitcoin is becoming the primary entry point for institutions to enter the digital asset market; second, Bitcoin is replacing gold as a means of value storage. These two logics have never changed, so we still believe Bitcoin will surpass $1 million in five years, and it may even far exceed that number.
Seven, Cathie's Top 3 cryptocurrency assets and crypto-related stocks
Jen: Let's talk about your focus beyond Bitcoin. With the continuous innovation in the cryptocurrency space, it seems your vision has extended beyond Bitcoin, and even your price expectations for 2030 have been adjusted. From your perspective, what blockchain protocols or projects are currently worth paying attention to?
Cathie Wood: We mainly invest in the public market, while also taking on the responsibility of educating investors, just like CoinDesk's role, so we cautiously guide clients into the crypto ecosystem. Our core holdings are Bitcoin (BTC) and Ethereum (ETH). In private funds, we had relatively more exposure to Solana (SOL), but recently when Ethereum's performance surpassed Solana's, we timely adjusted our weights.
These three (BTC, ETH, SOL) are currently our 'top three.' We are also paying attention to layer 2 networks. From the perspective of educating investors, we will analyze these three major assets in greater depth, using familiar language from the investment circle, such as return-risk ratio, Sharpe ratio, Sortino ratio, etc. Related research papers are already in preparation.
In addition, we will refer to the model of 'Bitcoin Monthly,' which may become a bi-monthly publication in the future, alternating months to release analyses of Ethereum, Solana, and other potential protocols, especially showcasing their signal characteristics through on-chain data. This transparency is something the stock or bond markets lack and is particularly valuable for institutional investors.
Jen: Earlier, you listed your top three cryptocurrency ecosystems. So do you have a similar 'top three' list for publicly traded companies related to cryptocurrency?
Cathie Wood: In our flagship fund ARKK, the fintech fund ARKF, and the next-generation internet fund ARKW (covering crypto and AI themes), Coinbase, Circle, and Robinhood all consistently rank in the top ten. Although Robinhood is not a purely crypto company, we kept asking them about their crypto layout in quarterly communications three years ago. At that time, they were contracting, and we reduced our attention for a while. But now they are fully diving into the crypto field; if you've seen their Analyst Day or new product launch, you'll find their goal is to win at all costs.
Eight, why MSTR is not in the top three
Jen: So, MicroStrategy is not in your top three?
Cathie Wood: MicroStrategy is indeed a bet on Bitcoin, after all, it is the largest asset in this field. However, Coinbase is also largely driven by Bitcoin's performance and can cover a broader crypto market. Additionally, while Bitmine is not in the top ten, we believe its strategic position is improving as Ethereum's popularity rises among institutions.
Nine, will quantum computing threaten Bitcoin?
Jen: Cathie, I would love to hear your thoughts because you are known for 'betting on the future,' and you have the ability to discern trends and make bold decisions on new technologies. We previously discussed that many people are now thinking about their positioning in the future world. In the Bitcoin realm, there is a saying that quantum computing may threaten Bitcoin's security. Since you are here today, I particularly want to know, do you think quantum computing could really threaten the Bitcoin ecosystem?
Cathie Wood: Of course, we often discuss this question. In fact, we promoted our former research director to Chief Futurist precisely because these long-term issues concerning survival are very important. He and our team, especially David Puell from the crypto team (many well-known on-chain analysis indicators are named after him), are very focused on this. Brett (Chief Futurist) and David have been assessing the breakthroughs we hear about in the quantum computing field. There has indeed been some progress, but more still represents incremental advancements, and we are far from a true technological leap. We judge that if quantum computing really poses a threat to Bitcoin, it might not be until the late 2030s or even the 2040s.
One reason is that the current pace of AI development far exceeds expectations, even surpassing what we had envisioned before founding ARK. Many tasks originally expected to be completed by quantum computing are now likely to be realized first by AI. Moreover, AI's performance has not shown any so-called 'ceiling' effect; on the contrary, the more computational power invested, the faster the performance improves. This means that much of the capital that might have flowed to quantum computing will continue to focus on AI in the short term, and we want to see how far AI can go.
Ten, the threat of innovation
Jen: You mentioned that the team repeatedly discusses these 'survival issues' related to the future when forming investment arguments. What are some that keep you awake at night?
Cathie Wood: In the past few years, what worried us the most was the poor regulatory direction in the United States. Over the past four years, we even seriously considered turning more towards overseas for innovation, especially in the blockchain field, as the innovation environment in the U.S. is being completely stifled. It is important to note that blockchain is the next generation of the internet, and the rise of the previous generation of the internet allowed the U.S. to lead the global tech revolution. If we miss this opportunity, the U.S. is likely to hand over the next larger wave of technological advancement.
From an investment perspective, the landscape in other parts of the world is more fragmented, and going to Europe involves facing dual regulatory pockets from both the EU and its member states, accompanied by geopolitical risks. So, for us, this is a tangible threat. I remember during a live broadcast or online seminar, I candidly said: 'Chairman Gensler is a menace to innovation.' Only after saying it did I realize that we are an SEC-regulated entity; would this lead them to retaliate against us? After all, there were indeed some retaliatory regulatory actions during that time. But we still decided we must speak out because this concerns not only us but also the future of all American tech companies, even if it comes with risks.
Jen: Has the SEC ever reached out to you because of your statements?
Cathie Wood: No, we haven't received any direct feedback. Of course, like all investment institutions, the SEC regularly examines us. Especially since we operate very transparently; for instance, we were the first firm to publish research for free on social media, sharing trading records daily, and maintaining a high level of transparency in our portfolios. Mutual funds do not do this because it brings more SEC scrutiny risk. But we have long known we would be frequently examined, so we must ensure compliance is flawless.
Our chief compliance officer previously served as an examiner at the SEC for four years, and we have always held ourselves to that standard. I'm not sure if the SEC feels more at ease with us because they never clearly tell you when the review is over or if everything is okay; if you don't receive a reply, then that's considered good news. But I believe we have undergone enough comprehensive or partial reviews that they are aware that we are 'more compliant than saints.'
Eleven, why ARK and Cathie maintain high transparency on social media
Jen: Cathie, you share a lot of information on social media, including trading records, and it is publicly accessible, which is completely different from many competitors. Why is transparency so important to you, and even became a core part of your operation?
Cathie Wood: After the financial crisis of 2008 and 2009, we began to observe trends in the financial market. At that time, in a brainstorming session at my former company, we noticed a phenomenon: mutual funds were losing market share, gradually being replaced by ETFs. At that time, I didn't really understand ETFs because they almost only existed in the passive investment field, not in the active management field we were in. We are active investors who trade daily, while passive investments might only rebalance once a quarter or even half a year.
When I truly understood the mechanism of ETFs, I immediately thought: 'Why can't we put active funds into the ETF structure?' So I volunteered to push this project at my previous company, just as they had already obtained an exemption from the SEC. At that time, I realized two things: first, this would disrupt mutual funds because ETFs have lower fees; second, ETFs are more transparent in every way. The crisis of 2008-2009 caused investors to lose trust in the financial system; they wanted to be on the same wavelength as fund managers, and we happened to meet that demand.
Today, many asset management companies have either completely shifted to passive strategies or have become 'highly benchmark-sensitive,' resulting in nearly identical holdings, such as heavily investing in a few large tech stocks (Mag 6). However, we are not like that; our goal is to provide investors with exposure to future-oriented operating methods. In technological revolutions, some giants will be disrupted while others will adapt, but we will reserve the largest positions for 'pure disruptors.'
From 2021 to early 2024, although the market was a bull market, the rise was concentrated in a few stocks, especially the Mag 6. We said this was not a healthy bull market. A healthy bull market would spread to more companies, and that is exactly what started to happen this year.
Returning to your question, the reason we stick to this model is that transparency is a real market demand. Back in 2020, we did not expect this approach to have such a significant impact. The pandemic lockdown forced global investors to stay home, leading to online shopping and online investing. We publicly share our research and trading records daily, resulting in countless videos interpreting our trades on YouTube, especially in Asia, which unexpectedly helped us grow into a global brand.
In the early days of the pandemic, my background in economics allowed me to quickly form a clear judgment: massive monetary and fiscal stimulus, soaring savings rates (peaking at 27%, now only 4-5%), coupled with supply chain disruptions, is the recipe for economic prosperity and volatility. The results were indeed such, with supply constraints, rising inflation, and the Fed's aggressive rate hikes putting immense pressure on innovation companies not part of the Mag 6. However, our openness and transparency allow investors to understand our logic and walk with us.
Twelve, Will AI surpass ARK?
Jen: Time is short, I have two more questions. Returning to thoughts about the future, you have researched AI extensively, do you worry that one day AI will surpass ARK in investment?
Cathie Wood: I see it from two aspects. The easiest strategies for AI to replace are passive investing and 'benchmark-sensitive' strategies, as these strategies are already highly standardized, and many investors are following safe bets like the Mag 6. Quantitative strategies (Quant) analyze historical factors—growth, quality, volatility, profitability, etc.—to slice the market, but a large portion of our strategies is labeled as 'Residual (unexplainable)' in their models because the future won't resemble the past, and quant relies on the past.
So, I believe that quant will be completely commoditized by AI. Our strategy relies on original research, and we even proactively open our research results to AI, such as OpenAI, Grok, and other large models, letting them help us with pattern recognition and improving efficiency, especially in applications regarding Wright's Law. Wright's Law is similar to Moore's Law, but it predicts cost declines based on output rather than time. We use it to forecast the cost curve of technology, a process that is very time-consuming, but AI can significantly accelerate this kind of work. AI will be a powerful tool, but I will not underestimate the creativity of human research teams.
Thirteen, Cathie's advice to her younger self
Jen: I want to end the interview with a question that echoes the beginning: If you could go back to your 20-year-old self, what would you say?
Cathie Wood: I would say: do well, keep an open mind, and don't panic. If you don't know your future direction while in college, try anything that interests you. I found that whether it was myself or colleagues who joined our company, if you immerse yourself in a field you love and are willing to learn, life will be enjoyable, although it won't be completely pressure-free, but overall it's worth it.
I truly love my current job. Everything happening in the field of innovation today has planted seeds during the first 20 years of my career, and I am fortunate to witness them sprout and grow. In the late 1990s, capital flooded into the internet, biotechnology, and other fields, and we knew that technology was not ready for scaling at that time; costs were too high. For example, the first human genome sequencing in 2003 cost $2.7 billion, while today it only costs $200. Yet, ironically, this most promising sector is performing the worst in the market, reflecting investor sentiment; when making money is easy, it often leads to bubbles; when everyone is worried and overlooks the most important opportunities, it is actually the beginning of a healthy bull market.
Moreover, this bull market is spreading to more areas, and we are pleased that blockchain is among them, allowing the traditional financial system to engage more with this new asset class, which is really important.
