- According to the CEO of cryptocurrency and technology investment firm Ark Invest, 2023 will be a defining moment for crypto assets.
- As financial limitations loosen and the macroeconomic outlook improves, risk-on assets such as cryptocurrencies will benefit.
If the CEO of cryptocurrency and technology investment firm Ark Invest is to be believed, 2023 will be a turning point for crypto assets as inflation declines and the Federal rates change course.
Cathie Wood, CEO and CIO of Ark Invest began her business video blog on 23 January by taking a quick look at the macroeconomic outlook. She claimed numerous indicators of decreasing inflation:
“Indicate that the Fed should turn soon.”
As financial restraints are eased and the macroeconomic outlook improves, this would be helpful for risk-on assets like cryptocurrency. She continued by saying that the company anticipates inflation to decline to the 2% Fed target level. Wood cautioned that inflation might drop below this mark because of the declining money supply and even turn negative.
A signal from the Federal Reserve
“We expect that will occur in the first half of 2023.”
This was because the market is awaiting a signal from the Federal Reserve. If interest rates decline below forecasts, Ark Invest portfolios should perform well.
Six active technology and FinTech exchange-traded funds, a crypto asset fund, blockchain venture investments, and a fund for disruptive innovation are all available through Ark.
In the meantime, Brett Winton, the chief futurist at Ark, discussed artificial intelligence (AI). She claimed that public blockchains, cryptocurrencies, and crypto assets, which are currently going through a difficult time, will become even more distinct from their scarcity in an era of abundance.
According to Wood, the deflationary nature of these technological advances will:
“Create a boom in the products and services linked with this innovation.”
The most recent action taken by Ark Invest was to sell some of its Grayscale Bitcoin Trust [GBTC] holdings for a profit and purchase 320,000 Coinbase [COIN] shares valued at around $17.6 million.
Cathie Wood predicted that one crypto sector will benefit from the well-publicized collapse of FTX. Decentralized networks, according to her, will become more crucial in the financial services sector because of the failures of FTX, cryptocurrency lender Celsius, and digital asset hedge fund Three Arrows Capital (3AC).
Crypto Market Movements
The bulk of assets is gradually entering local consolidation channels, which could serve as a temporary cooling off before the volatility returns to markets, as cryptocurrency investors take a wait-and-see approach to the market.
After the first week of January 2023, the dominance level of the top cryptocurrency asset surpassed the 40% range. According to the cryptocurrency economy aggregator Coin Gecko, Bitcoin [BTC] held a dominance of about 41.1% on 21 January.