Cathie Wood calls Bitcoin a rule-based money system, prefers it over Ethereum

Cathie Wood told the Master Investor podcast hosted by Wilfred Frost that she does not believe there will be many cryptocurrencies in the long run.

“Bitcoin owns the cryptocurrency space when it comes to pure crypto. Bitcoin is the cryptocurrency. We think it’s going to be the biggest one by far. By far,” she said.

According to the conversation, Cathie separated what she called “cryptocurrencies” from “crypto assets,” and placed Bitcoin at the very center of her outlook. She described Bitcoin as a monetary system built on rules, where the supply is capped at 21 million units, with about 20 million already in circulation today.

She then compared Bitcoin to stablecoins, calling them cryptocurrencies but explaining that they are tied to the U.S. dollar through collateral, mostly made up of Treasury securities. Cathie said stablecoins have found their place in DeFi because they can be used to earn income.

Cathie outlines stablecoin adoption and peer-to-peer finance

When asked why people in cities like London or New York would even need stablecoins when they can already move dollars or pounds easily, Cathie responded that there are two dominant players in the market.

“Tether is primarily outside the United States and outside Europe now after Mika—or do you call it Micah or Mika, I don’t know. The two have 90% of the market. Circle is quote unquote more regulatory compliant certainly in the United States. And there is a Euro version of USDC in Europe which has not taken off,” she said.

Cathie admitted that stablecoins had taken some of the demand away from Bitcoin, something her earlier analysis did not expect. She went further to say the real change brought by crypto is the removal of middlemen in finance. She described traditional banking as full of “toll takers” who charge high fees.

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“For credit cards, it’s automatic 2.5% tax on each transaction,” she said, stressing that blockchain makes those fees fall. In her view, transaction costs could eventually go down to 1% or less, compared with as high as 25% for remittances in countries like Nigeria.

Cathie added that those lending out stablecoins can earn higher returns than banks would ever allow, while borrowers too small for the traditional system are finally able to access loans. She also pointed out that DeFi’s transparency makes it safer in some cases.

“Anyone who was on-chain, their collateral was wiped out right away, meaning the financial institutions got their money back. If you were in the opaque and very centralized FTX ecosystem, you lost all your money. So it actually was safer to be on chain than to be at FTX, which of course was a fraudulent company,” said Cathie.

Cathie rejects Ethereum surpassing Bitcoin and lists her holdings

When Wilfred Frost brought up Tom Lee’s belief that Ethereum could surpass Bitcoin, Cathie disagreed. “Bitcoin serves three roles. It is the global monetary system rules-based quantity rule to be sure. It is also a technology—layer one blockchain technology never been hacked. And it is the first of its kind in a new asset class. We wrote our first white paper on that in 2016,” she explained.

Cathie did acknowledge Ethereum’s importance in DeFi. She described Ether as “the native currency in the DeFi ecosystem” and mentioned how fees are flowing to layer twos such as Coinbase’s Base and Robinhood’s planned system. She questioned whether the growing number of layer twos would end up competing and giving more power back to the base chain.

She named her firm’s main holdings, which she said are public. “Of course we’ve got Bitcoin now in our public funds. These trades are public. So I can tell you our exposures are Bitcoin, Ether. We’re finally able to get an acceptable from a regulator’s point of view way to play Ether and we chose BitMine immersion. And then Solana is the third one,” she said.

Cathie explained that Solana exposure came through Breera Sports, linked to a Solana treasury supported by the UAE and the Middle East, where her mentor Arthur Laffer sits on the board. She called Hyperliquid the “new kid on the block” and compared it to Solana’s early stage, while also pointing to protocols like Uniswap, Aave, and Jito.

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