Exclusive

Cathie Wood on The Block: The crypto revolution is coming - jump on or get out of the way

Quick Take

  • The Block talks to a top 50 Bloomberg-influencer Cathie Wood about why her investment firm is bullish on crypto
  • She says Twitter trumps quant software when it comes to finding quality research
  • Wood believes the market seriously undervalues tech innovation (Note: her firm predicts Tesla shares will hit $4,000)

Growing up, Cathie Wood didn't think she would end up founding a multi-billion dollar asset manager. She fancied herself doing one of two things: curing cancer or, if that failed, becoming a ballerina. Certainly, she did not see herself joining the financial world–or "the dark side"–as many of her young recruits referred to it.

But, while today she may not be a world-leading scientist, she believes being CEO of ARK Invest at least allows her to support those doing the groundbreaking work - be it in DNA laboratories, Tesla's factories, or blockchain startups.

"We are funding 'disruptive innovation.' Tech-enabled innovation that is going to transform the way the world works...It's going to make a whole load of companies and stocks 'value traps'. They will either disappear or be consolidated away."

For Cathie, blockchain perfectly fits this disruption model (alongside autonomous vehicles and robots). Costs will go down, and demand will boom; just give it 10 years.

"It is going to cause profound changes," Wood says. “I think it will be mainstream, ubiquitous" for payment systems across industries, calling the tech a "glorified distributed database."

She predicts–or wants–blockchain (it's unclear where the two separate) to most impact the "inefficient and opaque" financial services industry; a world she knows well as a Wall Street veteran. "It's going to bring transparency and good behaviour back," Wood says, "It'll be better cheaper, faster, and more productive...Most people won’t know they're on a new set of financial rails."

If you want evidence, look to the developing world she says.

"Businesses are crucified when they try and do cross-border trading...They're just using bitcoin as a free transition of money," pointing to the likes of Kenya and Nigeria.

Clearly, ARK Invest is no ordinary asset manager - not least because it is one of a handful of successful US asset managers with a female CEO. But it's also unique for its overwhelming reliance on one particular research and networking tool, Crypto Twitter, which Wood says other portfolio managers dismiss for compliance reasons.

"It's very easy [to cut through the noise]. If people are wasting our time...we just unfollow them," she says. "Over time, we refine our networks and we're engaging with the communities we're researching in a highly effective way. It