Banks Are In Deep Trouble Because of Crypto, Says Billionaire Cathie Wood

Cathie Wood CEO of Ark Investment Management LLC
Cathie Wood CEO of Ark Investment Management LLC

Cryptocurrencies were built to stand in the face of mainstream financial institutions; and banks may be feeling disrupted, Ark Invest CEO Cathie said. 

Wood who is popular for high-risk high-reward investments told CNBC’s “Crypto World” Thursday that investors are showing massive interest in decentralized finance (DeFi), and these applications could be a threat to the traditional banking space. There’s been a “share shift” when it comes DeFi loans, she said.

“Banks have a big problem,” Wood said from the Bitcoin 2022 conference in Miami. “They’re losing talent to crypto, so they’re having to raise wages to attract talent, and they’re losing business to DeFi. Lending and saving – a lot of it is taking place in DeFi right now.”

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DeFi is a term coined for the different financial instruments and services that are peer-to-peer, established on blockchains. The technology eliminate the need for middlemen and traditional institutions such as banks. Wood added that political institutions are increasingly adopting cryptos in a positive way. 

“What we’re seeing is 180 degrees different today than it was a year ago,” she said.

She cited the U.S. Treasury Secretary Janet Yellen’s change of heart regarding cryptocurrencies. Yellen has always criticized Bitcoin and altcoins because of their environmental harms and risks of illegal activity. 

“I remember I was asked at the time and I basically said she hasn’t studied the technology and she hasn’t studied the instruments of the new asset class. Well, it seems like she’s been boning up,” Wood said.

Wood’s firm was the first public asset manager to adopt Bitcoin, in September 2015. The billionaire said her firm believes Bitcoin will reach $1 million by 2030.