The Master Investor Podcast with Wilfred Frost

Crypto Bonus: Cathie Wood pt 2 – Why Bitcoin Will Always Be #1 Cryptocurrency
Aired: September 27, 2025
Guest: Cathie Wood
Host: Wilfred Frost

Episode Overview

In this bonus episode, Wilfred Frost welcomes back renowned investor Cathie Wood to discuss her views on the future of cryptocurrencies, why she believes Bitcoin will always retain its status as the leading cryptocurrency, and the evolving roles of stablecoins, Ethereum, and other digital assets. The conversation also touches on decentralized finance (DeFi), the importance of blockchain transparency, and the comparison between Bitcoin and gold as investment vehicles.

Key Discussion Points & Insights

1. Bitcoin’s Unique Position as the Leading Cryptocurrency

Timestamp: 00:00–02:35

• Bitcoin as "the" Cryptocurrency:

  • Cathie Wood asserts that Bitcoin is the foundational and dominant cryptocurrency, explaining:

    "Bitcoin owns the cryptocurrency space when it comes to pure crypto. Bitcoin is the cryptocurrency and we think it's going to be the biggest one by far. By far." (Cathie Wood, 00:04)

  • She distinguishes between “cryptocurrencies” (like Bitcoin) and “crypto assets” (such as tokens tied to platforms).

• Bitcoin’s Monetary Policy & Supply:

  • The hard cap of 21 million Bitcoins, with approximately 20 million now mined, underpins Bitcoin's value through "quantity theory of money."

2. Stablecoins: Use Cases and Impact

Timestamp: 02:35–05:45

• What are Stablecoins?:

  • Stablecoins like USDC and Tether are digital currencies pegged primarily to USD and collateralized by treasury securities.
  • Wood notes stablecoins’ growth, especially in enabling decentralized finance (DeFi) activities, allowing users to earn yields unavailable elsewhere:

    "Just this last week Coinbase introduced a product allowing holders of USDC...to loan their USDC in the DeFi ecosystem and they can earn as of last week 10.4%." (Cathie Wood, 01:37)

• Why Stablecoins Matter (Even in Developed Countries):

  • Despite efficient fiat systems in places like London and New York, stablecoins are poised to lower transaction costs further by removing financial “middlemen”:

    "In the traditional financial world...all of those middlemen...are there to lower risk...When we move into the world of blockchain technology, it’s peer to peer. The middlemen go away." (Cathie Wood, 03:42)

  • Refers to the “automatic 2.5% tax” (credit card fees) that could drop to near 1% or less with blockchain systems.

3. DeFi Lending & Transparency

Timestamp: 05:45–07:48

• DeFi's Value Proposition:
  • Cathie highlights DeFi platforms enabling savers to earn higher yields and borrowers (otherwise excluded from banks) to access capital.
  • Lending is often overcollateralized, providing some safety.

    "These are transparent ecosystems and many loans are over collateralized...it actually was safer to be on chain than to be at FTX, which of course was a fraudulent company." (Cathie Wood, 07:06)

4. Bitcoin vs. Ethereum: Which Will Lead?

Timestamp: 07:48–10:02

• Bitcoin’s Roles:

  • Cathie categorizes Bitcoin as:
    • A global, rules-based monetary system
    • A technological layer (layer one blockchain), never hacked
    • A new asset class
  • She underscores that these characteristics make Bitcoin unique and foundational.

    "Bitcoin serves three roles...the global monetary system, rules based, quantity rule to be sure...never been hacked. The other blockchains cannot say that." (Cathie Wood, 08:04)

• Ethereum’s Role in DeFi:

  • Ethereum, via its Ether token, is vital in powering the DeFi ecosystem.
  • Concerns arise over proliferation of Layer 2 scaling solutions, prompting potential competition but also reaffirming reliance on robust Layer 1s like Ethereum and Bitcoin.

    "I do think that Ethereum is playing a very important role and therefore Ether, the native currency in the DeFi ecosystem." (Cathie Wood, 09:17)

5. Other Cryptocurrencies Beyond Bitcoin and Ethereum

Timestamp: 10:02–12:14

• Concentrated Portfolio Approach:

  • Cathie Wood clarifies her firm’s focus is limited to a handful of major crypto projects:

    "It's really only a handful so far." (Cathie Wood, 10:19)

• Top Crypto Holdings:

  • Bitcoin
  • Ether
  • Solana:
    • Notably involved via Brera Sports and the Middle East, referencing treasury management and strategic partnerships.
  • Emerging Projects:
    • Mentions Hyperliquid (an up-and-coming ecosystem), Aave, Uniswap, and Jito (related to Solana), but sticks to primary investment in the “big three.”

6. Gold vs. Bitcoin: Safe Haven Assets

Timestamp: 12:14–14:46

• Gold’s Recent Performance & Appeal:

  • Wilfred notes an atypical day where gold rises as Bitcoin and Ethereum fall.
  • Cathie interprets the move primarily as a reaction to geopolitical risks rather than inflation worries:

    "I think what's happening with gold this time around is geopolitical risk." (Cathie Wood, 13:49)

• Why Ark Invest Doesn’t Own Gold:

  • Prefers to focus on "technologically enabled disruptive innovation."
  • Cathie remains vigilant on gold's performance as a market signal but sees its appeal as more relevant for older or wealth-preservation-focused investors amid uncertainty.

Memorable Quotes

• On Bitcoin’s Uniqueness:

  "Bitcoin is the cryptocurrency and we think it's going to be the biggest one by far. By far."
  (Cathie Wood, 00:04)

• On Stablecoins Easing Access to Yield:

  "...Coinbase introduced a product allowing holders of USDC...to loan their USDC in the DeFi ecosystem and they can earn as of last week 10.4%."
  (Cathie Wood, 01:37)

• On the Promise of DeFi:

  "Savers on the other hand who are loaning the money out, they get a much better yield."
  (Cathie Wood, 06:25)

• On Blockchain’s Security:

  "Layer one blockchain technology, never been hacked. The other blockchains cannot say that."
  (Cathie Wood, 08:13)

• On Portfolio Selectivity:

  "It's really only a handful so far."
  (Cathie Wood, 10:19)

• On Gold vs. Bitcoin:

  "We don't own it and we're not saying it's going to be a bad investment either. It's just not what we do technologically enabled disruptive innovation."
  (Cathie Wood, 12:49)

Notable Moments with Timestamps

• Bitcoin’s fixed supply and dominance: 00:04–01:10
• Stablecoins yield example (Coinbase/USDC): 01:37–02:35
• Stablecoins vs. fiat in developed markets: 03:21–05:45
• DeFi’s transparency vs. FTX collapse: 07:03–07:48
• Bitcoin’s unique attributes as monetary system and technology: 08:04–09:17
• ARK’s top crypto holdings (Bitcoin, Ether, Solana): 10:24–11:52
• Gold’s current function as a geopolitical hedge: 12:49–14:46

Summary Flow

Cathie Wood reiterates her unshakable belief in Bitcoin as the unrivaled leader of the cryptocurrency space, credits stablecoins for expanding DeFi participation, and draws a sharp distinction between the transparency of blockchain-based platforms and the pitfalls of opaque, centralized exchanges like FTX. She offers a nuanced perspective on Ethereum’s role, validates Solana’s ascent, and reaffirms her concentrated investment approach. In closing, she discusses the ongoing relevance of gold amid market uncertainty but maintains that technological innovation is the core strategy for her firm.