ARK Invest CEO Cathie Wood believes that digital wallets and blockchain tech were among “game-changing innovations” that the equity markets largely ignored in 2022.
In a Jan. 12 blog post on the ARK Invest website, Wood suggested that the equity market faced a “wall of worry” in 2022, caused by fears of entrenched inflation and higher interest rates, and largely ignored a number of innovative technologies.
Wood highlighted that digital wallets are “replacing cash and credit cards,” noting that they overtook cash as the top transaction method for offline commerce in 2020.
She also pointed out that digital wallets should be not overlooked. They also account for approximately half of all global online commerce in 2021.
We just sent this letter to our clients after the most difficult year in the equity market for innovative-based strategies. It highlights the breakthrough technologies that are already changing the world. Innovation solves problems according to us! https://t.co/YdBiIZhY0D
— Cathie Wood (@CathieDWood) January 13, 2023
Wood suggested that the recent collapse of crypto exchange FTX hasn’t affected the larger mission of what public blockchains were intended for. She said:
“Public Blockchains like Bitcoin and Ethereum have not skipped a beat in processing transactions.”
Wood highlighted the fact that the FTX collapse taught crypto investors to be more cautious about where they store crypto assets. He stated that the trading volume on decentralized crypto exchanges, which allow trading without a central broker, increased 37%, jumping from 8.35% – 11.4%.
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Wood said she has never in her “30 years working in portfolio management” experienced such unstable market conditions, saying she has never seen “markets this dislocated.”
The CEO suggested that the economy is facing a challenging situation, with a decrease in money supply, a decline in commodity prices and the “unwinding” of bloated inventories, which indicate a slowdown in inflation, and possibly even deflation.
Related: Visa is preparing plans to allow you auto-pay your bills from your crypto wallet
Wood noted in the report that the fear is high in investors stating that investors are holding “high levels” of cash not seen since the 9/11 crisis in 2001.
Other “game-changing” innovations that Wood believed the equity market “largely ignored” in 2022 included Artificial Intelligence (AI), electric vehicles, space exploration and 3D printing.
She believes despite uncertainty in the market, disruptive innovation technologies which “solve problems,” have historically “gained share during turbulent times.”