Cathie Wood says banks have a ‘big problem’ thanks to crypto

The cryptocurrency was originally created to circumvent old institutions — and banks might finally feel unsettled, said Cathie Wood, CEO of Ark Invest.

Known for her high-risk, high-reward strategy, Wood told CNBC’s “Crypto World” on Thursday that investor interest in DeFi, or decentralized finance, applications could threaten the traditional banking world. There has been a “share shift” when it comes to lending in DeFi, she said.

“Banks have a big problem,” Wood said at the Bitcoin 2022 conference in Miami. “They’re losing talent to crypto, so they have to raise salaries to attract talent, and they’re losing business to DeFi. Lending and saving – a lot of it is happening in DeFi right now.”

Decentralized finance is an umbrella term for the various financial products and services that are peer-to-peer, built on blockchains, and eliminate the need for traditional institutions that have historically provided access to these services.

Cathie Wood, Managing Director and Chief Investment Officer, Ark Invest gestures as she speaks during the Bitcoin 2022 Conference at the Miami Beach Convention Center on April 7, 2022 in Miami, Florida.

Mark Bello | Getty Images

Political institutions are another part of the establishment that is starting to react to crypto more positively, Wood said.

“What we’re seeing is 180 degrees different today compared to a year ago,” she said.

She noted the shift in stance from US Treasury Secretary Janet Yellen, who had previously expressed concern over crypto, opposed to its potential environmental issues and risk of illicit activity.

“I remember being asked at the time and I basically said she hadn’t studied the technology and she hadn’t studied the instruments of the new asset class. Well, looks like she boned herself,” Wood said.

Ark was the first public asset manager to gain exposure to bitcoin, in September 2015. Wood said the company still expects the price of bitcoin to rise to $1 million by 2030.

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