"We are also paying attention to some emerging projects, such as Hyperliquid. This project reminds us of the early development stage of Solana."

Compiled & Edited by: Deep Tide TechFlow

Guest: Cathie Wood, Founder and CEO of Ark Investment

Host: Wilfred Frost

Podcast Source: The Master Investor Podcast with Wilfred Frost

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

Broadcast Date: September 27, 2025

Key Points Summary

Cathie Wood is the founder and CEO of Ark Invest. She shared her strong belief that Bitcoin will become the leading cryptocurrency and explained the important role of stablecoins in the crypto ecosystem. She also mentioned her friendly divergence of views with Tom Lee from Fundstrat. Although she believes Ethereum will not surpass Bitcoin, her attitude towards Ethereum has changed, and she recently invested in BitMine.

Additionally, Cathie discussed the potential impact of gold's recent strong performance 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.

Highlights of Insights

• Ark's main investment focus is on Bitcoin, Ethereum, and Solana.

• There are not many truly promising cryptocurrencies. In the pure cryptocurrency space, Bitcoin dominates. Besides that, there are stablecoins, which are also cryptocurrencies.

• Bitcoin has three key roles. First, it is the foundation of the global monetary system; second, as L1, it has never been hacked; third, it is the pioneer in the field of crypto assets.

• Furthermore, we are also paying attention to some emerging projects, such as Hyperliquid. This project reminds us of the early development stage of Solana, and it has begun to prove its value and gradually compete with major players in the industry.

• We will also focus on other services, such as money market funds, and projects related to the Solana ecosystem, like Jito.

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

The Value of Stablecoins

Wilfred Frost:

I hear you are a strong supporter of cryptocurrencies. So do you believe in all cryptocurrencies, or are you only confident in certain specific ones?

Cathie Wood:

We do not believe that all cryptocurrencies have growth potential. In fact, we think there are not many truly promising cryptocurrencies. In the pure cryptocurrency space, Bitcoin dominates. Besides that, there are stablecoins, which are also cryptocurrencies, but they are mainly pegged to the US dollar, as they are typically backed by government bonds. Therefore, we believe Bitcoin is the only true cryptocurrency in the real sense, and it will become the largest one in the market. Bitcoin is a rules-based monetary system that follows the quantity theory of money. The total supply of Bitcoin is capped at 21 million, with about 20 million currently in circulation. This is what is known as the quantity theory. Stablecoins, on the other hand, are dollar-based digital assets. If you can find ways to use stablecoins, such as in DeFi, you can also earn yields. Just last week, Coinbase launched a product that allows users to lend USDC to others in the DeFi ecosystem. Although these loans cannot earn traditional interest payments due to regulatory reasons, users can still earn up to 10.4% returns.

Wilfred Frost:

I want to learn more about stablecoins. I can understand why dollar-denominated and easily transferable assets would be attractive. For example, in some countries, stablecoins might be used to avoid the risk of asset seizure. But for someone living in London or New York, what is the reason to use stablecoins? After all, dollars or pounds can already be easily transferred, earn interest, and have the backing of central banks and governments. What advantages are there to trading with stablecoins in these countries?

Cathie Wood:

You are right; currently, there are mainly two stablecoins in the market: Tether and Circle. Tether is primarily circulated outside the US and Europe, while Circle has stronger regulatory compliance in the US. Additionally, Circle has launched a euro-based USDC stablecoin, but it has not yet been widely adopted. In Europe, with the implementation of Mica (the regulatory framework for crypto assets), Tether and Circle have captured 90% of the stablecoin market.

So why do people in developed countries need stablecoins? We understand the demand in emerging markets, where people can use stablecoins to protect their wealth in economically unstable countries. We initially thought Bitcoin would take on this role, but the emergence of stablecoins has indeed taken 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 the intermediary roles in financial services. These intermediaries, which I have jokingly referred to as "toll booths," exist to reduce transaction risks and protect the security of transactions between financial institutions. However, in the peer-to-peer transaction model of blockchain, these intermediaries will be completely replaced. Simply put, traditional credit card transactions typically incur a 2.5% fee, which is a cost brought by intermediaries. The transaction fees based on blockchain can be significantly reduced. In developed countries, these fees may drop from 2% to 4% to below 1%, while in emerging markets, such as remittance fees in Nigeria, which can be as high as 25%, these costs are also expected to decrease significantly. Ultimately, blockchain technology will compress global transaction costs to very low levels.

Wilfred Frost:

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

Cathie Wood:

These changes take time to realize. For example, I just mentioned the USDC case, where someone said, "I can lend money at a 10.4% interest rate, right? Such rates cannot be found elsewhere." This is a high-yield savings method for depositors. Those borrowing at 10.4% typically cannot obtain loans from banks due to being too small in scale. DeFi is changing this situation, giving those who previously found it difficult to obtain loans a chance, while also providing depositors with higher returns.

The on-chain ecosystem is very transparent, and many loans are over-collateralized. We learned this from the collapses of cryptocurrencies like 3AC and Luna. On the blockchain, anyone's collateral that is insufficient in value will be automatically liquidated, meaning financial institutions can quickly recover funds. In contrast, in opaque and highly centralized systems like FTX, funds can be completely lost. Therefore, from a safety perspective, the transparent mechanisms on-chain are actually more reliable than FTX, which is clearly a fraudulent company.

The Key Role of Bitcoin

Wilfred Frost:

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

Cathie Wood:

Bitcoin has three key roles. First, it is the foundation of the global monetary system, adhering to strict quantity rules. This is a very important concept in itself. Second, as the first layer of blockchain technology, it has never been hacked, while other blockchains have not achieved this. This is also why the monetary system chooses to be based on Bitcoin. Third, it is the pioneer in the field of crypto assets; we wrote the first white paper for Bitcoin back in 2016. These attributes give Bitcoin a unique advantage.

However, Ethereum also plays an important role in the decentralized finance (DeFi) space. Ether is the native currency in the DeFi ecosystem, and many transaction fees flow to second-layer scaling solutions, such as Robinhood recently announcing the launch of its own second-layer network, similar to Coinbase's Base. These second-layer networks have garnered disproportionate fees. The question now is whether, as the number of second-layer networks increases, they will compete with each other, thereby enhancing the importance of the first layer. This is a trend worth watching and one of the reasons we invest in Ethereum. Nevertheless, I believe these competitive relationships may be something Tom and I can discuss in depth.

Focusing on Bitcoin, Ethereum, and Solana

Wilfred Frost:

For other cryptocurrencies, do you think there are many worth investing in, or are there actually only a few?

Cathie Wood:

Currently, only a few cryptocurrencies are worth paying attention to. In our public funds, we mainly invest in Bitcoin and Ethereum. These transactions 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 chosen Bitcoin mining companies as an important investment direction.

Besides Bitcoin and Ethereum, Solana is the third project we are focusing on. The investment in Solana is realized 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 that collaborates with Solana Treasury and has the support of the UAE, which makes Solana's role even more significant.

These three cryptocurrencies are our main investment focus. In addition, we are also paying attention to some emerging projects, such as Hyperliquid. This project reminds us of the early development stage of Solana, and it has begun to prove its value and gradually compete with major players in the industry.

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

Why is Gold Rising?

Wilfred Frost:

This year, gold's performance has clearly been outstanding. Do you think the reasons for investing in gold are stronger now than ever? What is your stance compared to Bitcoin?

Cathie Wood:

We do not invest in gold, but that does not mean it is a bad investment. It's just that gold does not align with the areas of technological innovation we focus on. We are more interested in technology-driven disruptive innovations. However, from an economic perspective, I always take gold's market performance seriously. Typically, a rise in gold often signals the onset of inflation, but this time the situation seems different.

We have been monitoring an indicator called the Metal to Gold Index, which measures the ratio of metal prices to gold prices. Currently, this ratio has dropped below 0.8 to 0.9. This concerns me, as there may be deeper underlying reasons. This could be related to the economic situation in China. They are still experiencing a deflationary adjustment due to real estate speculation. Additionally, I believe this rise in gold is more influenced by geopolitical risks.

For example, the chaos surrounding the H-1B visa policy that occurred last Friday night. This has made many people uneasy, especially foreign students and their parents from India and China, who may be wondering, "What will happen next?" Personally, I think this is just a negotiation issue between the US and India that will ultimately be resolved. After all, the US does not want to lose talented individuals from around the world, even though the current rhetoric may be concerning. But in this situation, the media is heavily reporting these events, and people are starting to think, "How should I respond?" Some wealthier investors, especially the older generation, may choose to shift their funds towards gold rather than digital assets.

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