Institutional investors may be the secret ingredient behind the next wave of growth for cryptocurrencies like Bitcoin.

Speaking at the CFA Societies Australia 2021 investment conference this week, ARK Invest CEO Kathy Wood suggested that investors and asset managers continue to underestimate the potential growth rates of technology’s biggest innovators and disruptors.

Ms Wood has previously been criticized for excluding FAANG companies (Facebook, Apple, Amazon, Netflix and Google) in her flagship ARK Innovation ETF, but she has defended her strategy by arguing that traditional valuation methods relying on discount rates and guesswork, usually fail to capture the big tech stocks of the future.

“We are looking for the next teeth. These are long-in-the-tooth FAANGs, although we think they still have very good growth,” she said.

According to Ms. Wood, exponential growth rates are quickly becoming a hallmark of these companies, and her firm’s non-consensus valuation approach is better positioned to identify stocks that are in the “sweet spot of the S-curves” of these technologies’.

“When we were making our assumptions about Tesla, and when we realized that Tesla had taken a leaf out of Apple’s book and designed a chip, in this case an AI chip instead of a computer chip, we said, well, if Tesla is right and can deliver, then it probably will take the lion’s share of the profits in the autonomous [drive] an opportunity that globally we believe will be a $10 trillion revenue opportunity in 2030. from scratch now.’

Asked about meme stocks, Ms. Wood joked that the only meme stocks her ETF owns or has ever owned will be Robinhood.

“Meme stocks would not be our kind of investment; we are focused exclusively on technology based innovation and most [meme stocks] are dinosaurs,” she said.

Finally, when asked about her expectations for Bitcoin, Ms. Wood predicted that the price of Bitcoin will quickly become significantly higher if institutional investors start to take it more seriously.

“If institutions around the world were to allocate 5 percent of their portfolios to bitcoin, that allocation alone … would add roughly $500,000 to today’s bitcoin price,” she said.

Regarding the regulation of crypto assets, Ms. Wood predicted that the US Securities and Exchange Commission will soon approve the US’s first crypto-linked ETF.

“I think we’re moving closer to a bitcoin futures ETF mostly because the SEC is noting that it’s much more interested in starting there,” Ms. Wood said.