Cathie Wood emphasizes Bitcoin's limited supply as a superior asset compared to gold, even as some investors express concerns over quantum computing risks.
Cathie Wood, the founder and CEO of ARK Invest, has made a compelling case for Bitcoin, asserting that its limited supply makes it a more valuable scarce asset compared to gold. This comes as Jefferies investment strategist Christopher Wood has opted to exclude Bitcoin from his portfolio, favoring physical gold and shares in gold mining companies instead.
In her New Year’s letter, Wood introduced her "coiled spring theory," discussing various economic factors including inflation, productivity, and asset valuations. She emphasized that Bitcoin's value is not just driven by inflation concerns but also by a growing disparity between increasing global capital and its limited supply.
Wood pointed out the contrasting performances of Bitcoin and gold in recent years. While gold surged by 65% in 2025, Bitcoin saw a decline of 6%. However, since October 2022, Bitcoin has rebounded impressively with a 360% increase, far outpacing gold's 166% rise. This, according to Wood, reflects a trend in global wealth creation that is not matched by gold's relatively modest supply growth of about 1.8% annually.
"Additional demand for gold may exceed its supply growth. Gold miners can increase production, which is something that cannot be done with Bitcoin," Wood stated.
Market Dynamics and Portfolio Diversification
Wood highlighted the inelastic nature of Bitcoin's supply, which is programmed to grow by approximately 0.82% over the next two years, slowing to 0.41% thereafter. This characteristic means that any increase in demand, particularly from spot ETFs, could significantly boost Bitcoin's price.
"If demand for Bitcoin continues to rise, the leading crypto asset will gain more advantages than gold due to its nature," Wood expressed.
She noted that the recent surge in gold has reached historically high levels, with its market capitalization relative to the M2 money supply returning to figures seen in the early 1930s and 1980s, which previously indicated potential high returns in the stock market following corrections.
Importantly, Wood pointed to Bitcoin's potential for diversification, citing a drop in the correlation between Bitcoin and gold to zero for the first time since mid-2022. This suggests that Bitcoin could serve as an effective tool for enhancing investment returns relative to risk in the years ahead.
Concerns Over Quantum Computing
Critics like Nick Carter have pointed out that developers are not adequately addressing the risks posed by quantum computing, which could undermine Bitcoin's value. In contrast, Blockstream co-founder Adam Back argues that effective systems capable of breaching Bitcoin's cryptography are still decades away.
