(Bloomberg) -- Cathie Wood said Binance Holdings Ltd.’s US legal problems will benefit Coinbase Global Inc. because it would eliminate its main competition.
The world’s two biggest cryptocurrency exchanges are facing a regulatory crackdown after the Securities and Exchange Commission this week sued them for allegedly peddling unregistered securities.
“We have Binance under increasing regulatory scrutiny for more criminal activities, fraud being one of them, therefore we have the competition for Coinbase disappearing, so that’s a good thing longer term for Coinbase.” Wood told Bloomberg Television on Thursday.
She said Coinbase isn’t accused of any criminal activity. “There are questions about what’s a security, about staking, those are the two questions that Coinbase and Binance are facing, but most of the other questions about Binance have nothing to do with Coinbase.”
Read more: Binance, Coinbase SEC Suits Deal Big Blow to Crypto
Her comments come after her funds on Tuesday boosted their holdings of Coinbase as shares slumped following the SEC’s action, with three Ark Investment Management LLC funds, including Wood’s flagship Ark Innovation ETF, buying 419,324 shares.
Read more: Cathie Wood Boosts Coinbase Stake as SEC Crypto Crackdown Widens
Ark is the fourth-largest holder of Coinbase and has been adding to its stake on dips for nearly a year.
Wood said she’s still confident in her $1 million target for Bitcoin, saying the more uncertainty and volatility there is in global economies the more Ark’s confidence increases in the token.
“We’ve just been through an inflationary scare, we think it was very supply chain driven and Bitcoin is a hedge against inflation,” she said. “We also believe now that the bigger risk is deflation, not inflation. Why would Bitcoin do well in that circumstance? It will do well because it’s an antidote to counterparty risk in the traditional financial system.”
--With assistance from Andy Clarke.
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