As you probably know by now, there have been a lot of crypto corrections in the market lately. Now, hedge fund veteran Cathie Wood explains these, and you can check out the details below.
ARK Invest founder said that the driving force behind these corrections is connected to a trend that is happening in the equity markets.
Putting pressure on commodities markets
In a YouTube video, Wood suggested that macroeconomic uncertainty is pushing the US dollar up, and this is putting pressure on commodities markets.
She also says that a “strike against technology, growth, and innovation” is weighing on the stock market. She believes that this is pulling crypto assets down with it.
It’s also important to note the fact that Wood suspects the strike won’t last long.
“The dollar going up suggests a flight to safety, and that is a downward force on inflation. Commodities are priced in dollars. The dollar is going up; all other things equal, commodity prices would go down.”
She continued and explained the following:
“In the crypto markets, we’re seeing a correction. They are starting to succumb to what we’re seeing in the equity market, which is this strike against technology, growth and innovation. We think that’s going to be short-lived.”
The online publication the Daily Hodl notes that she has a contrarian view on inflation and high equity prices.
As the same online publication notes, she believes tech and innovation stocks are not in a bubble but instead in “deep value territory.”
“Much like the early years of ARK’s research on and investing in electric vehicles and Bitcoin, disruptive innovation seems to be in deep value territory.”
Now, the crypto market is trying its best to recover in prices, and the optimistic price predictions continue to pour.
At the moment of writing this article, BTC and, more important, coins are trading in the green.