Ark Invest founder and CEO Cathie Wood has stated that the legal troubles faced by Binance Holdings in the US will eliminate Coinbase Global’s main competitor and work in favor of the company.
Following the Securities and Exchange Commission (SEC) filing lawsuits against both Binance and Coinbase, the world’s two largest cryptocurrency exchanges, it is noted that they are under regulatory pressure.
In an interview with Bloomberg TV, Wood said, “The increasing number of investigations into Binance, including fraudulent activities, means the elimination of the competitive environment for Coinbase. This is a good thing for Coinbase in the long term.”
Wood stated that Coinbase has not been charged with any criminal activity and said, “There are questions about what constitutes a security, what constitutes a stock, and these are two questions that both Coinbase and Binance are facing, but most of the problems Binance is facing do not apply to Coinbase.”
Wood’s comments came after Ark Investment increased its holdings in Coinbase following a drop in the company’s stock price following the SEC’s actions.
Ark is the fourth-largest shareholder in Coinbase and has been increasing its position in the company with each dip in the past year.
Wood also said she still believes in her $1 million target for Bitcoin and stated that the more uncertainty and volatility there is in global economies, the more Ark’s confidence in cryptocurrency grows.
“We had a recent bout of inflationary fear. We think it was largely supply-chain driven, and we think Bitcoin is a hedge against inflation in the traditional financial system,” the renowned investor said. “However, going forward, we believe the big risk is deflation, not inflation. So why should Bitcoin perform well in that case? Because Bitcoin is the antidote to counterparty risk in the traditional financial system.”
Wood faced criticism after her flagship ETF sold its stake in Nvidia Corp. in January, missing out on the epic rally that briefly pushed the chipmaker’s market value above $1 trillion. Wood defended her decision, citing concerns about the boom-bust cycle in the computer chip industry.