Cathie Wood Sees Bitcoin As Key Diversifier In Future Investment Portfolios

TLDR

• Bitcoin’s correlation with bonds was only 0.06 from 2020 to 2026, says ARK data.
• ARK Invest reports Bitcoin rose 360% since late 2022 due to fixed supply.
• Cathie Wood expects Bitcoin’s annual supply growth to slow to 0.4% by 2028.
• S&P 500 and REITs show 0.79 correlation, higher than Bitcoin’s 0.28 with stocks.

Cathie Wood, CEO of ARK Invest, sees Bitcoin becoming a strong portfolio diversifier in the coming years. In her 2026 market outlook, Wood pointed to Bitcoin’s low correlation with traditional asset classes and its predictable supply growth as key factors for its strategic value.

Bitcoin’s Low Correlation with Traditional Assets

Cathie Wood, CEO of ARK Invest, views Bitcoin as a strong addition to investment portfolios in the years ahead. In her 2026 outlook, she explained that Bitcoin’s return patterns differ from other asset classes, which supports its use as a diversifier.

Based on ARK’s analysis of weekly returns from January 2020 through early January 2026, Bitcoin had a 0.14 correlation with gold and only 0.06 with bonds. In contrast, the S&P 500’s correlation with bonds stood at 0.27. Bitcoin’s highest correlation during that period was 0.28 with the S&P 500, which remains far below the 0.79 correlation between the S&P 500 and REITs.

Wood wrote, “Bitcoin should be a good source of diversification for asset allocators looking for higher returns per unit of risk.”

Fixed Supply and Limited Inflation Risk

Another factor in Wood’s outlook is Bitcoin’s fixed supply schedule. She said that Bitcoin’s supply is controlled by protocol and cannot respond to price increases as gold mining does. According to ARK, Bitcoin’s supply will increase by around 0.82% annually over the next two years, then slow to 0.41%.

Wood compared this predictable growth to gold, which saw a 65% price rise in 2025 even as Bitcoin slipped 6%. She noted that while gold supply also grows slowly, Bitcoin’s issuance is entirely pre-set by its protocol, making it less responsive to changes in investor demand.

ARK’s research suggests that scarcity, combined with growing demand, has helped drive a 360% rise in Bitcoin’s price since late 2022.

US Economic Outlook and Bitcoin’s Role

Wood’s broader economic thesis describes the US economy as a “coiled spring.” She explained that although the economy has seen stable GDP growth, it has experienced rolling recessions in areas like housing and manufacturing. This was largely due to the Federal Reserve’s rate hikes, which pushed interest rates from 0.25% in March 2022 to 5.5% by July 2023.

She expects that upcoming deregulation, tax cuts, and relief from interest rates could trigger a strong recovery. Lower taxes on overtime, tips, and Social Security may increase household disposable income, which could rise from 2% to 8.3% in early 2026. Corporate cash flows could also grow due to lower tax rates and permanent depreciation benefits.

Bitcoin Amid Currency and Market Shifts

In 2025, the gold price rose to $4,300, up 166% since October 2022, even as Bitcoin saw price pressure. Still, Wood said the key use for Bitcoin is not as a direct substitute for gold but as a separate asset with a distinct behavior pattern.

She also discussed the potential for a stronger US dollar, noting that conditions similar to the early 1980s — which she called “Reaganomics on steroids” — could return. These include lower inflation, strong tech investment, and a stable dollar, possibly leading asset managers to reassess Bitcoin’s place in diversified portfolios.

ARK’s long-term scenarios for Bitcoin in 2030 remain unchanged, ranging from $300,000 in a bear case to $1.2 million in a bull case.

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