- Cathie Wood's Ark Invest reiterated its view that bitcoin will climb to $500,000 over the long term.
- Wood spoke with Bloomberg on Wednesday with a bullish outlook for the cryptocurrency, even amid a sharp decline in the space.
- "We go through soul searching times like this and scrape the models, and yes, our conviction [on bitcoin] is as high," Wood said
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A 33% decline in bitcoin over the past two days hasn't shaken Cathie Wood's confidence in the cryptocurrency, as she reiterated Ark Invest's view that it will trade to $500,000 in the long-term.
"We go through soul searching times like this and scrape the models, and yes, our conviction [on bitcoin] is as high," Wood said in an interview with Bloomberg on Wednesday.
Ark Invest's $500,000 bitcoin price target is predicated on the scenario where all institutional asset managers allocate upwards of 5% of their portfolios to the cryptocurrency.
But the rise of bitcoin to more than $60,000 earlier this year also put a spotlight on its high energy consumption, which is partially powered by fossil fuels like coal and natural gas. This led Tesla CEO Elon Musk to halt the EV manufacturer's acceptance of bitcoin as a form of payment for its products.
But that thinking around bitcoin and its environmental impact is misguided, according to Ark Invest, as it believes the cryptocurrency will accelerate the adoption of solar and other forms of renewable energy.
As to whether bitcoin continues to move much lower from current levels, Wood admitted that it's possible.
"You never know how low is low when a market gets very emotional," Wood said, observing that many traders dumped their position after bitcoin traded below its 200-day moving average around the $40,000 level.
But any further decline may represent a solid buying opportunity, Wood said, as she believes bitcoin has entered a capitulation mode.
"We were looking at all the indicators this morning. They are all suggesting that we are in the capitulation phase, which is a really great time to buy, no matter what the asset is. A capitulation phase is buy, it's on sale," Wood said.
Wood's Ark Invest is taking advantage of the recent decline in cryptocurrencies, as the firm has been buying shares of crypto-exchange Coinbase in several of its ETFs amid the decline, according to ARK's daily trading report.