ARK Invest CEO Cathie Wood has positioned Bitcoin as a key investment diversification tool for the coming years in the firm's 2026 outlook report. Wood emphasized that Bitcoin's low correlation with traditional asset classes like gold, stocks, and bonds offers investors the potential for higher returns per unit of risk.
An analysis conducted by ARK Invest, examining weekly returns between January 2020 and early January 2026, reveals Bitcoin's strong portfolio diversification characteristics. The data shows a correlation coefficient between Bitcoin and gold of only 0.14. This is notably low compared to the 0.27 correlation between the S&P 500 index and bonds. Bitcoin's correlation with bonds was measured at its lowest level, 0.06, while its correlation with the S&P 500 was at its highest, 0.28—still limited compared to relationships between traditional assets.
Wood attributes Bitcoin's long-term value proposition to its fundamental supply structure. She explained that the Bitcoin protocol strictly limits supply growth, predicting the annual rate of increase in new Bitcoin supply will be approximately 0.8% over the next two years, declining to around 0.4% thereafter. This mathematically determined and predictable supply creates a natural scarcity.
The combination of this limited supply and increasing global demand has driven Bitcoin's price approximately 360% higher since the end of 2022. Wood stated that if these dynamics continue, Bitcoin could assume a more central role in portfolios for both institutional and individual investors as a core diversifier.
