ARK’s Cathie Wood says Bitcoin’s low correlation and fixed supply make it a 
powerful diversification tool, after a 360% price surge since late 2022. ARK 
Invest CEO Cathie Wood stated in the firm&#8217;s 2026 outlook report that Bitcoin 
will serve…

Cathie Wood: Bitcoin emerges as top diversification bet for 2026 portfolios

Cathie Wood is arguing that the next phase of US policy and macro could 
recreate an early-1980s style risk-on regime, one that, in her telling, 
strengthens the case for bitcoin as a portfolio diversifier even as it 
complicates the “digital gold” narrative. In a post on X, the ARK Invest CEO 
said “the next three years could be Reaganomics on steroids,” pointing to 
deregulation, tax cuts, “sound monetary policy,” and “peace through strength” 
as ingredients for a stronger dollar and capped gold prices. Her January 15 
“New Year letter,” titled Cathie Wood’s 2026 Outlook: The US Economy Is A 
Coiled Spring, lays out the mechanics behind that analogy and places crypto 
explicitly inside the policy and productivity story. A “Coiled Spring” Macro 
Thesis Wood’s central claim is that the US has looked sturdier than it really 
is because weakness has rotated through rate-sensitive pockets rather than 
hitting the whole economy at once. “Despite sustained real gross domestic 
product (GDP) growth during the past three years, the underlying US economy 
has suffered a rolling recession and has evolved into a coiled spring that 
could bounce back powerfully during the next few years. In response to COVID- 
related supply shocks, the record-breaking 22-fold surge in the Fed funds rate 
from 0.25% in March 2022 to 5.5% in the sixteen months ended July 2023 pushed 
housing, manufacturing, non-AI capital spending, and low-to-middle income 
America into recession.” Related Reading: Bitcoin Rally Accompanied By ‘Very 
Bullish’ Whale-Retail Behavior, Santiment Says She anchors the housing leg 
with a specific trough: existing home sales fell 40% from a 5.9 million annual 
rate in January 2021 to 3.5 million in October 2023, which she notes is “a 
level last seen in November 2010.” From there, Wood pivots to policy impulse 
and cash-flow relief. “Thanks to the confluence of deregulation and lower 
taxes (including tariffs), inflation, and interest rates, the rolling 
recession which has characterized the last few years in the US could turn 
quickly and sharply during the next year and beyond. Deregulation is 
unleashing innovation in every sector, led by the first AI and Crypto Czar, 
David Sacks, in the AI and digital assets space. Meanwhile, lower taxes on 
tips, overtime, and social security should hand US consumers significant 
refunds this quarter, potentially driving real disposable income growth up 
from ~2% at an annual rate during the second half of 2025 to ~8.3% this 
quarter.” She also argues corporate cash flows could be boosted by accelerated 
depreciation, writing that it could push the effective corporate tax rate 
“down toward 10%,” with 100% first-year depreciation for equipment, software 
and domestic R&amp;D made permanent and retroactive to January 1, 2025. Gold, 
Bitcoin, And The Dollar Wood’s inflation case is concrete and component- 
driven. She points to oil falling from about $124 on March 8, 2022 to a level 
that’s roughly 53% lower, and down about 22% year-over-year as of ARK’s 
January 12 data cut. She adds that single-family home sale prices are down 
about 15% from the October 2022 peak, while existing home price inflation 
(three-month moving average) decelerated from roughly 24% YoY in June 2021 to 
about 1.3%. On labor, she cites non-farm productivity up 1.9% YoY (third 
quarter), compensation per man-hour up 3.2%, and unit labor cost inflation at 
1.2%. She then pushes a real-time check: Truflation at 1.7% YoY as of January 
7, nearly 100 bps below CPI-based inflation. The crypto hook comes through her 
attempt to split gold’s recent run from bitcoin’s role in portfolios. “During 
2025, the gold price appreciated 65% as the price of bitcoin slipped 6%. While 
many observers have attributed the 166% surge in the gold price from $1,600 to 
$4,300 since the end of the US equity bear market in October 2022 to the risk 
of inflation, another interpretation is that global wealth creation… has 
outpaced the ~1.8% annualized increase in the gold supply globally.” Related 
Reading: Glassnode: Bitcoin Is Back At $96K, Hitting The Same Sell Ceiling 
Again Wood then leans on supply schedules and correlations. She notes 
bitcoin’s supply is “mathematically metered” to rise about 0.82% per year for 
the next two years before slowing to ~0.41%, and argues that diversification — 
not “digital gold” rhetoric — is the cleaner allocator lens. In ARK’s 
correlation matrix using weekly returns from 1/1/2020 through 1/6/2026, 
bitcoin’s correlation is 0.14 to gold, 0.06 to bonds, and 0.28 to the S&amp;P 500; 
the S&amp;P 500–bonds correlation is shown at 0.27. Finally, she brings it back to 
FX: after a year in which the trade-weighted dollar (DXY) fell 11% in the 
first half and 9% for the full year, Wood argues that higher US returns on 
invested capital, driven by fiscal, deregulation, and US-led technological 
breakthroughs, could push the dollar higher, echoing the early Reagan period 
when “the dollar nearly doubled.” If Wood’s “Reaganomics on steroids” framing 
gains traction, the near-term market implication is less about a single 
bitcoin price target and more about positioning: a regime she expects to 
feature falling inflation, lower rates, and heavy AI capex (data-center 
systems investment up 47% to nearly $500 billion in 2025, with a further 20% 
to roughly $600 billion expected in 2026) is one where allocators may revisit 
where bitcoin sits on the risk spectrum, and whether its low cross-asset 
correlation is the more durable thesis than any one-line comparison to gold. 
While Wood’s 2026 outlook does not publish a specific Bitcoin price target, 
ARK has previously outlined 2030 scenarios for BTC of roughly $300,000 (bear), 
$710,000 (base), and $1.2 million (bull). At press time, BTC traded at 
$95,685. Featured image created with DALL.E, chart from TradingView.com

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