Crypto investment firm Ark Invest founder Cathie Wood has relinquished all of the firm’s PayPal holdings, showing greater confidence in the long-term growth of the Cash App payment system, which uses the Bitcoin Lightning Network.
Wood explained her firm’s move at the Bitcoin 2022 conference in Miami, which ended on April 9.
The Lightning Network (LN) is a Layer 2 solution for Bitcoin that aims to enable faster and cheaper transactions. Financial technology company PayPal operates payment app Venmo as a direct competitor to Block (formerly Square) cash app.
“@ARKInvest sold, PayPal, whose Venmo is a major competitor to Cash App, has completely exited.
(Cash App has) much more conviction – especially when it comes to bitcoin.” pic.twitter.com/mUGkdWGMFX
— Miles Suter (@milessuter) April 10, 2022
Wood said in an interview with CNBC on April 8 that she made the decision to discontinue PayPal for the Cash app because of her broader approach to integrating digital asset wallets. She said that although Venmo has started absorbing Bitcoin (BTC), “it’s more of a follower of Cash App.”
“We tend to place our bets on those who we think will be the winners… As we consolidated our portfolios in a risk-free period, we chose Block over PayPal.”
Wood went on to say that her firm’s belief in Cash App is based on what she believes is organically driven user growth, “as opposed to a more top-down approach” from Venmo.
In general, Wood believes retail investors have pushed the crypto market to this point, as she said:
“I don’t think most institutional investors are positioned the way they will eventually be. Retail has really taken the lead here.”
Venmo currently has 70 million users and $850 million in profits, compared to Cash App’s $44 million and $2.03 billion in profits in 2021, according to data from app tracker Business of Apps. The stark difference in their ability to generate net profits could be another motivating factor in Ark’s assessment of the two brands.
Related: Bitcoin plunges to April lows as US dollar strength hits highest level since May 2020
As Ark Invest has taken a bullish stance on Cash App, its bitcoin product lead Miles Suter announced on April 7 that American users will be able to automatically invest a portion of their direct deposits into bitcoin.
Wood is a big Bitcoin supporter who reiterated her prediction in the interview that BTC would hit $1 million by 2030.
https://cointelegraph.com/news/cathie-wood-s-ark-invest-dumps-paypal-favoring-bitcoin-friendly-cash-app Cathie Wood’s Ark Invest is leaving PayPal in favor of bitcoin-friendly cash app