The Fusion of Bitcoin and AI

The fusion of Bitcoin and AI can potentially trigger a transformation in corporate operations and thus potentially reshaping productivity and cost dynamics.

This view was recently reinforced by Cathie Wood of Ark Invest, global asset manager specializing in thematic investing in disruptive innovation. She expanded on her prediction, adding that AI could lead to 50% GDP growth within a decade.

Cathie Wood and the Bitcoin-AI convergence

Ark Invest’s CEO Wood, who oversees over 50 billion dollars’ worth of assets under custody, pursues a stubborn pro-technology strategy. Wood’s well-known enthusiasm for Bitcoin is evident through ARK’s endeavors concerning spot Bitcoin exchange-traded funds (ETF) as unique cryptocurrency investment vehicles.

In the same vein, Ark is no stranger to digital asset sector investments, with substantial holdings in Coinbase and Robinhood.

In terms of the greater implications, Wood is convinced that the convergence between Bitcoin and AI could transform the way companies are organized. This shift, she says, would lead to the collapse in costs and a boost in productivity. She has arrived at these conclusions by looking at the adoption S-curves of Bitcoin and AI.

The curve represents the beginning, growth, and maturity of the nexus of these two technologies. Thus, Ark’s investment strategy operates on the firm belief that Bitcoin, as well as AI, have qualities that will witness inevitable adoption.

Are AI stocks performing well?

Artificial Intelligence (AI) is already reshaping industries, and it could prove to be a long-term growth driver more impactful than that of the internet. Given this tremendous potential, Bitcoin and AI could gradually see and benefit from more investment inflows to these two technologies.

In line with this vision, Ark has systematically allocated investments to various AI-related stocks, demonstrating the company's strong belief in the rising and rapidly-developing technologies.

The group is often criticized for the expensive, high-multiple and sometimes illiquid stocks in their portfolio. It is no secret that the investment assets they oversee have suffered heavy losses in 2022, with the flagship ARK Innovation ETF (NYSEARCA:ARKK) down 50% and the ARK Autonomous Technology and Robotics ETF (BATS:ARKQ) weaker by 34%. Yet, these setbacks do not seem to faze them.

AI means business

On a practical level of implementation, AI models embedded in smart contracts executed on a blockchain can be used to streamline operations. They can be deployed to execute transactions, such as re-orders, payments, or stock purchases based on set thresholds and events.

In addition, they can be used to more effectively resolve disputes or select the most sustainable shipping method.

The application of AI algorithms on the blockchain can also promote the natural evolution and data sorting of the blockchain. In short, the sheer computing power of today’s artificial intelligence can help blockchains run more efficiently and smoothly.