Wood | Ark Invest's Cathie Wood: Ark Invest's Three Prongs, Bitcoin, Ethereum, Solana are the Ultimate Choices

Original Title: Cathie Wood Part II: Why Bitcoin Will Always Be #1 Cryptocurrency

Original Source: The Master Investor Podcast with Wilfred Frost

Compiled and Translated by: DeepTech TechFlow

Guest: Cathie Wood, Founder and CEO of Ark Investment

Host: Wilfred Frost

Air Date: September 27, 2025

Key Points Summary

Cathie Wood, the founder and CEO of Ark Invest, shared why she firmly believes that Bitcoin will become the leading cryptocurrency. She also explained in detail the significant role of Stablecoins in the crypto ecosystem. She mentioned her amicable disagreement with Tom Lee from Fundstrat on viewpoints. While she believes Ethereum will not surpass Bitcoin, her attitude towards Ethereum has changed, and she recently invested in BitMine.

Furthermore, Cathie discussed the recent strong performance of gold and its potential impact on the cryptocurrency market and the overall financial market. She provided valuable insights for investors to navigate challenges in this rapidly changing field, helping them better grasp market trends and investment opportunities.

Exciting Highlights

· Ark's primary investment focus is Bitcoin, Ethereum, and Solana.

· There are not many truly promising cryptocurrencies. In the pure cryptocurrency field, Bitcoin takes the lead. In addition, there are Stablecoins, which are also cryptocurrencies.

· Bitcoin plays three key roles. Firstly, it is the foundation of the global monetary system; secondly, as an L1, it has never been hacked; and thirdly, it is the pioneer in the field of crypto assets.

· In addition, we are also keeping an eye on some emerging projects, such as Hyperliquid. This project is reminiscent of Solana's early development stage, and it has now begun to prove its worth, gradually competing with industry giants.

· We will also pay attention to other services, such as money market funds, and projects related to the Solana ecosystem, such as Jito.

· We do not invest in gold, but that does not mean it is a bad investment.

The Value of Stablecoins

Wilfred Frost: I heard you are a strong supporter of cryptocurrency. So do you believe in all cryptocurrencies, or do you only have confidence in certain specific cryptocurrencies?

Cathie Wood: We do not believe that all cryptocurrencies have potential for development. In fact, we believe that there are not many cryptocurrencies with real prospects. In the pure cryptocurrency space, Bitcoin dominates. In addition, there are stablecoins, which are also cryptocurrencies, but primarily pegged to the US dollar as they are usually collateralized by government bonds. Therefore, we believe Bitcoin is the only true cryptocurrency, and it will become the largest in the market. Bitcoin is a rule-based currency system that follows the quantity theory of money. The total supply of Bitcoin is capped at 21 million, with around 20 million currently in circulation. This is the so-called quantity theory. Meanwhile, stablecoins are digital assets pegged to the dollar. If you can find a way to use stablecoins, such as in DeFi, you can also earn returns. Just last week, Coinbase launched a product that allows users to lend their USDC to others in the DeFi ecosystem. Although due to regulatory reasons, these loans do not receive traditional interest payments, users can still earn returns of up to 10.4%.

Wilfred Frost: I would like to further understand stablecoins. I can see why an asset priced in dollars and easily transferable would be attractive. For example, in some countries, stablecoins may be used to mitigate the risk of asset seizure. But for people living in London or New York, what is the reason for using stablecoins? After all, the dollar or pound can already be easily transferred, earn interest, and have the support of central banks and governments. What are the advantages of stablecoin transactions in these countries?

Cathie Wood: You are right. Currently, there are mainly two types of stablecoins on the market: Tether and Circle. Tether circulates mainly outside the USA and Europe, while Circle has stronger regulatory compliance in the USA. In addition, Circle has also introduced a Euro-based USDC stablecoin, but it has not yet been widely adopted. In Europe, with the implementation of Mica (Markets in Crypto-Assets Regulation), Tether and Circle have captured 90% of the stablecoin market share.

So, why do people in developed countries also need stablecoins? We understand the demand in emerging markets, where in economically unstable countries, people can protect their wealth through stablecoins. We once thought Bitcoin would take on this role, but the emergence of stablecoins has indeed taken away a portion of Bitcoin's market, which we did not anticipate in our initial analysis.

In the world of blockchain technology, we are gradually eliminating intermediary roles in financial services. These intermediaries, I jokingly referred to them as "toll booths." Their purpose is to reduce transaction risk and ensure transaction security between financial institutions. However, in the blockchain's peer-to-peer transaction model, these intermediaries will be completely replaced. Simply put, a traditional credit card transaction usually incurs a 2.5% fee, which is the cost brought by the intermediary. Transaction fees based on blockchain can be significantly lower. In developed countries, these fees may decrease from 2% to 4% to below 1%, and in emerging markets, such as Nigeria, remittance fees could be as high as 25%, with these fees also expected to be substantially reduced. Ultimately, blockchain technology will compress global transaction costs to very low levels.

Wilfred Frost: Where are these fees currently? Because mining and transaction costs of cryptocurrencies are still far from dropping to 1%.

Cathie Wood: These changes take time to materialize. For example, as I just mentioned the example of USDC, someone may say, "I can lend out funds at a 10.4% interest rate, right? Such rates are unattainable elsewhere." This is a high-yield savings method for depositors. And those borrowing at a 10.4% interest rate are usually unable to obtain loans from banks due to their small scale. DeFi is changing this panorama, allowing those who previously had difficulty accessing loans to now have opportunities, while also providing higher returns to depositors.

The on-chain ecosystem is very transparent, with many loans being overcollateralized. We learned this from cryptocurrency crash events like 3AC and Luna. On the blockchain, anyone's collateral is automatically liquidated if its value is insufficient, meaning financial institutions can quickly recover funds. Whereas in systems like FTX, which are opaque and highly centralized, funds may be entirely lost. Therefore, from a security standpoint, the on-chain transparent mechanism is actually more reliable than FTX, which is evidently a fraudulent company.

The Key Role of Bitcoin

Wilfred Frost: A few weeks ago, we interviewed Tom Lee, who is a Bitcoin supporter, but he is more optimistic about Ethereum's future. He believes Ethereum's scale will surpass Bitcoin. Why do you think he's wrong? Why is Bitcoin always more important than Ethereum?

Cathie Wood: Bitcoin plays three key roles. Firstly, it serves as the foundation of the global monetary system, following strict scarcity rules. This is a very important concept in itself. Secondly, as a first-layer blockchain technology, Bitcoin has never been hacked, unlike other blockchains. That is why the monetary system chooses to be based on Bitcoin. Thirdly, it is the pioneer in the realm of crypto assets, with our first whitepaper on Bitcoin dating back to 2016. These attributes give Bitcoin a unique advantage.

However, Ethereum also plays a significant role in the decentralized finance (DeFi) space. Ether is the native currency of the DeFi ecosystem, with many transaction fees flowing to second-layer scaling solutions. For example, Robinhood recently announced the launch of its own second-layer network, similar to Coinbase's Base. These second-layer networks have seen disproportionate fee inflows. The current question is whether, as these second-layer networks proliferate, they will compete with each other, thereby enhancing the importance of the first layer. This is a trend worth monitoring and one of the reasons we invest in Ethereum. Nonetheless, I believe these competitive dynamics may be a topic Tom and I can delve into further.

Focus on Bitcoin, Ethereum, and Solana

Wilfred Frost: Are there many other cryptocurrencies you think are worth investing in, or is it actually just a few?

Cathie Wood: Currently, only a few cryptocurrencies are worth considering. In our public funds, we primarily invest in Bitcoin and Ethereum. These trades are public, so I can tell you that we have found a way to invest in Ethereum that complies with regulatory requirements. Additionally, we have also chosen Bitcoin mining companies as a significant investment focus.

Aside from Bitcoin and Ethereum, Solana is the third project we are watching closely. Our investment in Solana is through Brara Sports. Some people think I or Ark have acquired some sports teams, but that is not the case. Brara Sports is a company collaborating with Solana Treasury and has received support from the UAE, roles that have made Solana's presence more significant.

These three cryptocurrencies are our primary investment focus. Apart from these, we are also keeping an eye on some emerging projects like Hyperliquid. This project is reminiscent of Solana's early development stages, and it has already begun to prove its worth and gradually compete with industry heavyweights.

We will also pay attention to other services, such as money market funds, and projects related to the Solana ecosystem, such as Jito. While these derivative projects are important, if you ask us about our main investment focus, it is still Bitcoin, Ethereum, and Solana.

Why is Gold Rising?

Wilfred Frost: Gold's performance this year has been remarkably strong. Do you think the investment case for gold is now stronger than before? What is your stance compared to Bitcoin?

Cathie Wood: We have not invested in gold, but that does not mean it is a bad investment. It's just that gold does not align with our focus on the technological innovation space. We are more focused on those technology-driven disruptive innovations. However, from an economic perspective, I always take the performance of gold in the market seriously. Typically, a rise in gold prices often signals the onset of inflation, but this time seems to be different.

We have been monitoring an index called the Metals vs. Gold Index, which measures the ratio of metal prices to gold prices. Currently, this ratio has dropped to below 0.8 to 0.9. This concerns me, and there may be deeper reasons behind it. This may be related to the economic situation in China. They are still going through a deflation adjustment due to real estate speculation. Additionally, I believe that this recent rise in gold is more influenced by geopolitical risks.

For example, the chaotic H-1B visa policy event last Friday night. This has made many people uneasy, especially foreign students from India and China and their parents, who may be worried: "What will happen next?" Personally, I think this is just a negotiation issue between the U.S. and India, and it will eventually be resolved. After all, the U.S. does not want to lose talented individuals from around the world, although the current rhetoric may be worrisome. But in this situation, the news media widely reported these events, and people began to think, "How should I respond?" Some wealthier investors, especially the older generation, may choose to shift their funds to gold rather than digital assets.