ARK’s Cathie Wood blames Elon Musk, ESG investors for recent crypto crash

ARK’s Cathie Wood blames Elon Musk, ESG investors for recent crypto crash

ARK Investment Management founder Cathie Wood thinks she is aware of who’s responsible for the recent plunge in cryptocurrency costs — Elon Musk and the ESG motion.

Speaking Thursday at CoinDesk’s Consensus 2021 conference, Wood mentioned “lots of institutional shopping for went on pause,” and that “It was precipitated by the ESG motion and this notion, which was exacerbated by Elon Musk, that there are some actual environmental issues with the mining of bitcoin.”

Recent studies have discovered the vitality utilization behind crypto mining is akin to that of some medium-sized nations, and far of it is coal powered; crypto bulls have challenged these findings.

While risky even beneath the very best circumstances, bitcoin’s newest fall was precipitated by Musk tweeting May 12 that Tesla Inc.
TSLA,
+1.89%
would cease accepting bitcoin as cost for its automobiles, citing extreme fossil-fuel utilization in crypto mining. Musk has since mentioned he’s working with builders and miners on extra eco-friendly crypto-mining processes. Since then, some cryptos, together with bitcoin
BTCUSD,
-3.32%,
have misplaced greater than 50% of their worth from recent peaks.

“Elon most likely acquired just a few calls from establishments,” Wood said in the CoinDesk interview, noting that BlackRock Inc.
BLK,
-0.03%
is Tesla’s third-largest shareholder.

BlackRock CEO Larry Fink “is concentrated on ESG and particularly on local weather change,” she mentioned. “I’m positive BlackRock registered some complaints and maybe there are some very massive holders in Europe who’re extraordinarily delicate to this.”

Investors have been flocking to ESG — environmental, social and governance — themed property in recent years as socially accountable investing has caught on.

See: Investors could also be keen to sacrifice returns for ESG — however right here’s the place they haven’t needed to, says Deutsche Bank

Recent strikes apart, Wood predicted Musk can be a constructive pressure for bitcoin in the long term, and should even assist cut back its environmental footprint. “He has inspired much more dialog, much more analytical considering. And I do imagine he’s going to develop into part of the method,” she mentioned.

Since tumbling final weekend, bitcoin costs have gained 13% over the previous 5 days, although are nonetheless down about 30% over the previous month. Ethereum
ETHUSD,
-3.84%
has rallied greater than 30% this week, and dogecoin
DOGEUSD,
-0.48%
is up 11%; each have made slight positive aspects over the previous month, in accordance with information from Kraken.

Read extra: The Tom Brady of asset administration? People like to hate Cathie Wood, however her funds get outcomes

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About the Author: Daniel