Ark Invest's Cathie Wood says bitcoin will thrive amid ‘deflationary chaos’ created by AI and innovation

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Ark Invest's Cathie Wood says bitcoin will thrive amid ‘deflationary chaos’ created by AI and innovation Exponential tech will force down prices and stress legacy finance, for which bitcoin offers a trustless alternative, said Wood at Bitcoin Investor Week. By Helene Braun , AI Boost | Edited by Stephen Alpher Feb 12, 2026, 5:42 p.m. Make us preferred on Google Ark Invest CEO Cathie Wood in a conversation with ProCap Financial CEO Anthony Pompliano at the Bitcoin Investor Week in New York. (CoinDesk) What to know : Cathie Wood argues that bitcoin is a hedge not only against inflation but also against a coming wave of technology-driven, productivity-led deflation. She says rapid cost declines in artificial intelligence and other exponential technologies will trigger "deflationary chaos" that traditional financial institutions and the Federal Reserve are unprepared for. In her view, bitcoin’s decentralized design and fixed supply make it a safer alternative to fragile, debt-based financial systems that could be strained by deflation and disrupted business models. New York — Bitcoin BTC $ 65,998.73 isn’t just a hedge against inflation, according to ARK Invest CEO Cathie Wood, but against something more disruptive: deflation driven by technological acceleration. STORY CONTINUES BELOW Don't miss another story. Subscribe to the Crypto Daybook Americas Newsletter today . See all newsletters Sign me up By signing up, you will receive emails about CoinDesk products and you agree to our terms & conditions and privacy policy . In a conversation with Anthony Pompliano at Bitcoin Investor Week in New York, Wood argued that traditional financial systems are unprepared for a coming “productivity shock” powered by artificial intelligence (AI), robotics, and other exponential technologies. That shock, she said, will push prices down rapidly, upend legacy business models, and create what she called “deflationary chaos.” “If these technologies are so deflationary, it’s going to be tough for the traditional world — used to 2% to 3% inflation — to adjust,” Wood said. “They’ll have to embrace these technologies faster than expected.” That deflation, in her view, won’t come from economic collapse, but from breakthroughs that slash costs and boost output. She cited data showing AI training costs falling 75% per year and inference costs (what it takes to generate an AI response) dropping by as much as 98% annually. As a result, businesses are becoming far more productive with fewer inputs, leading to lower prices. Wood said this kind of innovation-led deflation is being misread by the Federal Reserve, which still relies on backward-looking data. “They could miss this and be forced into a response when there’s more carnage out there,” she warned. In that scenario — where traditional financial institutions are caught flat-footed — bitcoin’s appeal becomes clearer. “Bitcoin is a hedge against inflation and deflation,” she said. “The chaotic part of this is... disruption all over the place,” referencing underperformance in software-as-a-service stocks and emerging counterparty risks in areas like private equity and private credit. “Bitcoin doesn’t have that problem.” Bitcoin, she argued, offers a trustless alternative that is insulated from the fragility of traditional finance. As central counterparties and legacy institutions come under pressure, bitcoin’s decentralized architecture and fixed supply become strategic advantages. Wood also noted that bitcoin’s simplicity stands in contrast to the complexity of layered financial systems, which may face pressure as deflation compresses margins and undermines debt-based growth models. “This is the opposite of the tech and telecom bubble,” she said. “Back then, investors threw money at tech when the technologies weren’t ready. Now, they’re real — and we’re on the flip side of the bubble.” She emphasized that ARK’s portfolios have been built around the convergence of disruptive technologies, including blockchain, for years. The firm remains one of the largest holders of Coinbase (COIN) and Robinhood (HOOD) among many other allocations in crypto companies. While markets remain volatile, Wood argued that bitcoin — and innovation-focused investments more broadly — stand to benefit as the economic narrative shifts from inflation to productivity-driven deflation. “Truth will win out,” she said. “We believe we’re on the right side of change.” Cathie Wood Bitcoin News AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You Accelerating Convergence Between Traditional and On-Chain Finance in 2026? By CoinDesk Jan 30, 2026 Commissioned by Societe Generale-FORGE Read full story More For You Bitcoin sinks below $66,000 as crypto prices follow U.S. stocks lower By Stephen Alpher 57 minutes ago Coinbase and Robinhood are down big again today as the crypto bear market pressures trading volumes. 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