Cathie Wood, CEO of ARK Invest, believes that digital wallets and blockchain technology were among the “game-changing innovations” that stock markets largely ignored in 2022.
In a January 12 blog post on the ARK Invest website, Wood suggested that the stock market faced a “wall of worry” in 2022, caused by fears of entrenched inflation and rising interest rates, and largely ignored a number of innovative technologies.
Wood pointed out that digital wallets are “replacing cash and credit cards,” noting that they have overtaken cash as the primary transaction method for offline commerce in 2020.
Further arguing that digital wallets should not be overlooked, she noted that they also account for around 50% of global online commerce in 2021.
After the toughest year ever in the equity market for innovation-based strategies, we just sent our clients this letter highlighting cutting-edge technologies that are already transforming the world. We believe that innovation solves problems! https://t.co/YdBiIZhY0D
— Cathie Wood (@CathieDWood) January 13, 2023
Wood suggested that the recent collapse of crypto exchange FTX did not affect the larger mission of what public blockchains were intended for. She noted:
“Public blockchains like Bitcoin and Ethereum haven’t skipped a beat in transaction processing.”
Wood highlighted how the collapse of FTX has prompted crypto investors to be more diligent about where they store their crypto assets, saying that the share of trading volume on decentralized exchanges, which allow trading without an intermediary central, increased by 37%, from 8.35% to 11.4%.
Wood said she had never experienced such volatile market conditions in her “30 years working in portfolio management”, saying she had never seen “such dislocated markets”.
The CEO suggested that the economy is facing a difficult situation, with shrinking money supply, falling commodity prices and the “unwinding” of bloated inventories, indicating slowing inflation, or even a deflation.
Related: Visa thinks up plans to let you pay bills automatically from your crypto wallet
Wood noted in the report that fear is high among investors saying investors are holding “high levels” of cash not seen since the 9/11 crisis in 2001.
Other “game-changing” innovations that Wood thought the stock market “largely ignored” in 2022 included artificial intelligence (AI), electric vehicles, space exploration and 3D printing.
She believes that despite market uncertainty, disruptive innovation technologies that “solve problems” have historically “gained market share in turbulent times.”