Cathie wood of ARK Invest Fame is in the news again. This time around, we’re spotlighting how decentralized finance, or DeFi for short, poses a significant threat to traditional finance. If the well-known investment guru is right, DeFi will overturn the financial situation that has existed for centuries. Wood made a comment at the Miami Herbert Business School last week.
Why Wood’s Words Are Important
Wood is respected as one of the country’s top investors and financial professionals. Wood is the CEO of the popular Ark Invest Group, which chooses to own several “disruptor” ETFs. She argues that decentralized finance, which features cryptocurrencies and Web3, will put an end to traditional financial systems full of inefficiencies and loopholes.
Wood did not disturb her to emphasize that the pending turmoil caused by cryptocurrencies is a net plus for our financial system and society as a whole. Wood and others looking forward to the collapse of norms with new solutions that feature disrespect for conventions claim that DeFi is a step in the right direction.
DeFi provides financial products that do not require the use of intermediaries. Examples of such intermediaries include banks, exchanges and brokerage firms. These “intermediaries” in the financial industry will soon be replaced by blockchain, smart contracts and other high-tech solutions.
Are financial institutions ready for collapse?
According to Wood, the decentralization of the financial world brought about by cryptocurrencies, digital wallets, NFTs, and other destructive forces will ultimately lead to the collapse of some, if not all, financial institutions. Wood claims that this fall has already begun with grace. She emphasized the fact that DeFi is now increasing its lending and savings ratio to appeal to everyday people and institutions by combining relatively low interest rates with high savings rates.
If Wood is right, DeFi will grow rapidly over the next few months and years, eventually reaching a point where it will significantly disrupt financial norms. Wood realized that DeFi was already under test due to recent market weaknesses, geopolitical uncertainties, and recessions, but emerged relatively unscathed.
Bitcoin and other cryptocurrencies have slid to welcome the New Year, but most other securities are down as well. Moreover, keep in mind that Russians, Ukrainians, and others all over Europe have recently poured money into cryptocurrencies amid the collapse of the Russian ruble currency. Wood pointed out that DeFi customers are flocking to Bitcoin and Ethereum at a high rate in the face of market volatility. In short, it seems that the public, like gold, silver and other precious metals, sees crypto as a figurative port during an economic storm.
Does the crypto go to the moon?
Wood did not keep the fact that he was bullish on digital currencies such as Bitcoin for the past year. She even states that Bitcoin will reach a value of $ 500,000 within the next 50 years. If Wood’s bold predictions come true, Bitcoin will reach $ 1 million by 2030.
Look ahead weeks or months to see if the crypto continues to be stable as the world becomes uncertain day by day. If Wood is right, Bitcoin, Ethereum and other cryptocurrencies are worth buying for posterity.
