[DigitalToday AI Reporter] Cathie Wood, CEO of Ark Investment Management, said bitcoin will play an increasingly important role in institutional investor portfolios and rated it a valuable diversification tool in the firm’s 2026 market outlook report.

On Jan. 17, CoinDesk, a blockchain media outlet, reported that Wood said bitcoin shows low correlation with major asset classes such as gold, stocks and bonds, and is a factor that cannot be ignored in asset-allocation strategies.

She said, "Bitcoin will be a good diversification tool for investors seeking to improve risk-adjusted returns." Ark Investment Management data show that since 2020 bitcoin has become less correlated in price with stocks, bonds and gold. For example, bitcoin’s correlation coefficient with the S&P 500 was 0.28, lower than the correlation coefficient of 0.79 between the S&P 500 and real estate investment trusts (REITs). This suggests that while bitcoin is more volatile than other assets, it may be favorable from a portfolio-diversification perspective.

Cathie Wood has long voiced strong support for bitcoin and forecasts its price could rise to $1.5 million by 2030. But Jefferies strategist Christopher Wood recently cut bitcoin’s weighting in investor portfolios to 0 percent from 10 percent, recommending gold instead. He said quantum computing technology could weaken the security of the bitcoin blockchain and argued this could reduce its appeal as a long-term store of value.

By contrast, Morgan Stanley’s Global Investment Committee recommended increasing bitcoin allocations to as much as 4 percent, and Bank of America also approved a similar strategy. CF Benchmarks also said a conservative bitcoin allocation could improve portfolio efficiency, while Itaú Asset Management, Brazil’s largest asset manager, recommended investing in bitcoin as a hedge against foreign-exchange and market shocks.