Cathie Wood, founder and CEO of Ark Invest and a prominent Bitcoin advocate, has shared significant insights regarding the cryptocurrency's market dynamics.
In a discussion with Fox Business, a US media outlet, Wood stated that the long-standing four-year cycle historically observed in Bitcoin's performance has been disrupted.
Wood recalled that Bitcoin's volatility was once exceptionally high, with corrections often leading to drops of up to 90%. These significant fluctuations were previously understood as part of a predictable four-year cycle.
However, Wood indicated that this pattern is no longer consistent. She observed that Bitcoin's volatility has substantially decreased in recent years. Wood now believes that the four-year cycle has been broken due to this reduced volatility and the rapid entry of large-scale investors into the Bitcoin market.
Volatility in Bitcoin used to be high, with drops reaching 75-90%. However, volatility has decreased recently, and Bitcoin has only experienced a 30% drop.
There was a fear of a 4-year cycle in Bitcoin, but we believe that this cyclical structure has now been broken.
Wood attributes this shift to the growing influence of institutional investors. Their participation, she explained, contributes to stabilizing Bitcoin's price and mitigates the severity of significant declines. According to Wood, this increased institutional demand marks a critical juncture that could prevent substantial future drops in Bitcoin's price history.
Wood also expressed her belief that Bitcoin reached its bottom a few weeks prior to her statement.