Cathie Wood: Bitcoin Positioned to Thrive Amid AI-Driven Deflation
New York — Bitcoin (BTC $69,648.01) is emerging as more than a hedge against inflation, according to ARK Invest CEO Cathie Wood. Speaking at Bitcoin Investor Week in New York, Wood framed the cryptocurrency as a safeguard against an even more disruptive force: deflation fueled by rapid technological innovation.
In a discussion with Anthony Pompliano, Wood warned that traditional financial systems are ill-prepared for a coming “productivity shock” driven by artificial intelligence, robotics, and other exponential technologies. These advances, she said, will sharply lower costs, upend legacy business models, and create what she calls “deflationary chaos.”
“If these technologies are so deflationary, it’s going to be tough for the traditional world — used to 2% to 3% inflation — to adjust,” Wood said. “They’ll have to embrace these technologies faster than expected.”
Wood emphasized that this deflation stems not from economic collapse, but from breakthroughs that increase output while reducing inputs. She cited data showing AI training costs dropping 75% per year and inference costs falling as much as 98% annually, driving higher productivity and lower prices.
She also cautioned that the Federal Reserve, relying on backward-looking data, may misread the trend and act too late. “They could miss this and be forced into a response when there’s more carnage out there,” she said.
In that environment, bitcoin’s appeal grows. “Bitcoin is a hedge against inflation and deflation,” Wood explained. Its decentralized architecture and fixed supply insulate it from the fragility affecting central counterparties and traditional institutions.
Highlighting the broader impact, Wood noted ARK Invest’s portfolios are built around disruptive technologies, including blockchain, with significant holdings in Coinbase (COIN) and Robinhood (HOOD).
“Truth will win out,” she concluded. “We believe we’re on the right side of change.”
