Cathie Wood-headed ARK Invest’s Director of Research Brett Winton is calling Bitcoin (BTC) a “novel economic institution” and said its potential outweighs its energy requirements — a stance diametrically opposite taken by Tesla Inc TSLA CEO Elon Musk.
What Happened: Winton made his comments on Twitter Inc’s TWTR social media platform Thursday in a string of posts.
The Ark executive said that Bitcoin and other decentralized smart contracting platforms are “displacing a legacy financial ecosystem that is already misunderstood and significantly more opaque results in terrain fertile for large-scale misinterpretation.”
He pointed out that “the human and economic potential that such a system can unleash far outweighs the cost of the energy required to maintain it.”
Winton pointed out the flaws in the current social contract which he said only works for “for certain prioritized parties in certain political contexts,” — adding, “rule of law should not just be for the rich.”
Why It Matters: Winton’s comments a day after Tesla decided to stop accepting BTC for payments, citing environmental concerns. Musk later clarified on Twitter that he still strongly believes in cryptocurrencies but “can’t drive a massive increase in fossil fuel use, especially coal.”
The Tesla CEO said he was working with DOGE developers to improve that cryptocurrency’s “system transaction efficiency.”
Last month, Ark Invest and Jack Dorsey-led Square Inc SQ released a whitepaper that argued that Bitcoin mining is an opportunity to transition the world to renewables.
“The bitcoin and energy markets are converging and we believe the energy asset owners of today will likely become the miners of tomorrow,” the two companies concluded.
ARK’s flagship fund — ARK Innovation ETF ARKK — has Tesla as its largest holding with 3.38 million shares valued at nearly $2 billion as of Thursday. Wood's firm has a $3,000 price target on Tesla's shares for the year 2025.
The fund also has piled on shares of the recently listed cryptocurrency platform Coinbase Global Inc COIN and held 2.23 million shares worth approx. $623.72 million.
Price Action: Tesla shares closed nearly 3.1% lower at $571.69 on Thursday in the regular session and gained 0.32% in the after-hours trading. BTC traded 1.4% lower at $49,594.77 at press time.
Read Next: Elon Musk Asks Cathie Wood Her Views On Ratio Of S&P Market Cap To GDP Being High
Photo by Daniel Oberhaus on Flickr
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