Cathie Wood: Crypto Market May Have Bottomed Out, Bitcoin Still the Institutional Favorite

On December 14, Cathie Wood—founder of ARK Invest—stated that during the October 11 flash crash, Bitcoin boasted the strongest liquidity among all crypto assets, often leading sell-offs that dragged down other currencies (which saw steeper declines). With markets already pricing in the relevant information, she noted the asset may have already bottomed out. Wood emphasized Bitcoin represents a new global monetary system and asset class, serving as institutions’ preferred entry point into crypto and meriting a frontline position in institutional asset allocation. Regarding Ethereum and Solana, Wood noted the narrative is shifting. Ethereum, she said, is institutions’ infrastructure of choice, with Layer 2 solutions built atop it. However, as Layer 2s proliferate rapidly, whether Ethereum faces "commoditization" risk remains worth watching. Still, its ecosystem continues expanding, making it ARK’s second choice. Solana, meanwhile, leans more toward a consumer-focused blockchain ecosystem and could also factor into institutional expansion down the line. On asset allocation, Wood explained ARK’s flagship strategy cannot directly hold crypto ETFs, so the firm focuses on stock-based exposure to the crypto industry—including Coinbase, Robinhood, and stablecoin player Circle—plus small positions in Ethereum and Solana. Currently, crypto-related assets make up ~12-13% of the portfolio, a "relatively appropriate" proportion, she added. She also noted markets are watching whether major traditional financial firms (e.g., JPMorgan, Bank of America, Wells Fargo, UBS) will formally launch Bitcoin ETFs in this cycle—a decision that could emerge as a key variable shaping the market’s next phase.