Cathie Wood :"This Is the EXACT Reason Why BTC Is Ripping Massively | (New Prediction 2026)

Added: 2026-05-11

[00:00:00]Kathy Wood has been watching the non-defense capital spending chart since the early 1990s. It tracks how much American businesses are investing in equipment, machinery, and infrastructure outside of the defense sector. Every single cycle across those three decades, it peaked at roughly the same level and pulled back without fail. And so many analysts built that ceiling into their models, treating it less like a pattern and more like a permanent feature of the economic landscape until this cycle when it didn't pull back. Instead of hitting that familiar ceiling and retreating, it blew straight through it and kept moving rapidly and without hesitation away from a level that had contained it for over 30 years. And when you see a base that wide finally give way after holding for three decades, the move that follows is not typically noise. It tends to be real and it tends to last far longer than people expect because everyone who spent years painting that ceiling is now caught on the wrong side of a structural shift. Bitcoin sits at the center of where she thinks that capital is going next. In this video, we're going to walk through the case she's making. Let's get into it.

[00:00:55]>> Now, what's interesting about this chart, and I've uh watched it really since since the early '9s, uh we peaked at roughly the same level every other cycle. And now we've blown out and and and are moving rapidly in in away from that former peak. Uh so you know in the stock market when you say you've had a big base and it's lasted in this case 30 35 years the breakout um is significant and probably will be sustained uh I think thanks to the deregulation and favorable tax policies here in the United States as I discussed earlier. Of course, of course, uh the AI boom and the power boom uh is behind this, but we're even beginning to see uh capital standing away from those two spaces moving uh higher. And in fact, what's been so fascinating is Intel, uh, Corning, um, Flextronics, now called Flex, names from the previous bubble. Cisco, uh, are are Oh, today AI, my goodness, it's been, you know, a singledigit grower for forever and it now it's now gotten a hyperscaler order.

[00:02:28]uh wanting to leverage off its content delivery network. Uh so uh you know these are blasts from the past and it's basically saying that this AI boom is um is carrying you know the old guard along with it all hands on deck. Let's do this. So it's fascinating. Uh but look at this. This surprised me. this is manufacturing construction for computer and electronics and um it's into this year and I said what the heck this includes uh semiconductor manufacturing and other component manufacturing in the United States is going down. What's that? Uh it's the chips act in 2022 which was part of the stimulus that year as trying to get us out of the COVID crash. And uh you can see how how you know extended it it was. We went from uh below 20 billion to $120 billion. So that's a six-fold increase and now we're down to 70. We think this is going to turn around uh for obvious reasons. Um and uh it will add to that non-defense uh capital spending uh chart that you just saw.

[00:03:52]uh the trade deficit which is the last piece of GDP that we review um we doubt is going to go uh it's going to improve much from here because imports are increasing faster than exports and uh doesn't surprise us. We think our relative growth rate is higher than the rest of the world.

[00:04:14]>> The metals to gold ratio that's the signal she's watching. When industrial metals outperform gold, it historically means the economy is expanding, factories are running, supply chains are moving, and investors are willing to chase growth over safety. When gold pulls ahead, it usually means people are scared and running to the oldest safe haven on Earth. Right now, that ratio is trying to turn. Cathy Wood admits it might be turning partly because gold is falling, not because metals are suddenly surging. But she's taking even that as a constructive signal because gold falling while Bitcoin rises tells you something very specific about where confidence is going >> here. Uh we're into market indicators.

[00:04:50]Uh and we're beginning to see slow slow but that metals to gold ratio in green there. It's trying to turn. uh maybe more because gold is falling than metals increasing but at least uh we're seeing some stabilization.

[00:05:09]Uh we are not seeing much of improvement in the 10year Treasury yield. Uh but if growth picks up dramatically and the 10-year Treasury yield were to stay uh around here, uh that would suggest that the yield curve um is going to continue flatten and perhaps invert and in a recovery. And if we look back to the last technology revolution which was telephone, electricity, internal combustion engine building on the railroad ecosystem uh that had been built out in the United States during that period, the 50 years through the roaring 20s, the yield curve was inverted most of the time and the average inversion was roughly 100 basis points. Here is the price to gold ratio.

[00:06:05]As I've mentioned, um a strategist uh I've always admired, Charles Gob of govcal. Um it really believes that we're going back into a 70s style environment.

[00:06:19]And here you can see the S&P fell relative to gold very dramatically. He is focused on our deficit, the the government deficit and and our debt level. And uh I've already told you what we think about that. We disagree with him. We think this is going to reverse and we think it will go to all-time highs. Uh we've got a little bit of a leading indicator here. uh despite the the rapid increase in oil prices, um this ratio S&P to oil is closer to its all-time high. And we like to look at both gold and crude oil often do a ratio of them. Uh but here with transitive property, you can you can see we're using uh the S&P and um it's closer to its high. So, we think it also will go to an all-time high because we really do think oil prices now that the UAE has moved out of OPEC uh that it's going to open the floodgates. It's been frustrated for years, years and years.

[00:07:28]And of course, we have Venezuelan oil gushing out as well. And the US, it is stunning. the US uh crude oil exports have gone from essentially zero in 2015 to 6 million barrels per day and our production is at 13 million barrels per day and this oil price is inviting it's a clarion call for even more production so we think we're going to see big drops in oil prices in the years ahead and of course Russia is it's the only way to finance the war, but it'll only be it'll be the only way to finance uh its u return from war and getting its economy back on track. Um and finally, in terms of at least we have a few more indicators, but these are the big four for us. Uh watching Bitcoin to gold.

[00:08:25]Bitcoin is moving up relative to gold.

[00:08:27]this um this uh would suggest that we've held the sort of the higher lows. The trend is up, shall I say? The trend is up over time and we do believe it is up over time. We would not be surprised to see gold continue to fall, especially if we're right on the dollar and bit Bitcoin continue to increase.

[00:08:49]>> On Bitcoin to gold, she says the trend's up. She says she wouldn't be surprised to see gold continue to fall as Bitcoin continues to climb. That's a strong directional call and it's not coming from someone who has been a Bitcoin maximalist for years. Cathy Wood runs a fund that looks at long cycle technology adoption. Her lens is structural and from that lens, what she's describing is a capital rotation, the same kind of rotation that has happened before when a new asset class proved it could carry the functions of an old one more efficiently. Now, Bitcoin has been replacing gold in certain narratives since 2017. That argument has been made and has failed to materialize on a timeline many predicted. So, what's different this time? A few things are genuinely different and worth separating from the hype. Bitcoin's all-time high reached over $126,000 in October 2025, and the asset is currently trading in the low to mid $80,000 range. That means it has had a significant draw down from its peak, and institutional buyers are still coming in, not fleeing. When institutional buyers hold through a pullback of that magnitude, it changes the character of the asset. It says the holding is not purely speculative. Major Bitcoin holders added approximately 270,000 BTC over just one month between April and early May, buying into weakness. That is not the behavior of fair weather participants. It's the behavior of entities with a long enough horizon to absorb short-term pain. The counterpoint is this. Gold's multi,000-year track record as a store of value isn't canceled by one cycle of underperformance against Bitcoin. Gold doesn't need internet infrastructure. It doesn't need regulatory clarity. It doesn't have key management risk. For some holders, central banks, pension funds, and sovereign wealth funds, those distinctions matter enormously. Bitcoin replacing gold across all those use cases is a thesis that is building, not one that has arrived. What Kathy Wood is saying is that the trajectory points in that direction. She's not saying it's done. And that distinction matters.

[00:10:38]>> And here two measures of uh risk, measures of risk, credit default swaps in the banking system, especially with the private credit debacle. We've been we've been saying we've said it's not systemic. This would corroborate it. The latest tick here has been down. And finally, uh the high yield uh spread, high yield bonds or junk bonds relative to 10-year bonds in terms of their yields. Again, very low by historical standards. Uh no spike in the aftermath of the p uh private credit um uh selloff here. So um with that that's good news. Uh I know that the market has been trying for uh this year even though the market itself is up. Um the innovation space has been frustrating. Parts of it have done very well. Anything in space and defense tech has done very well. uh but anything touching software even fintech and the payments ecosystems uh they have been hurt and we think there's uh a lot of confusion sell now and ask questions later. So uh as you can see because we post our trades every day we've been pi picking some of the babies uh h out of the bathwater uh as it's been thrown away. So, um, uh, we're we're expecting though as the economy turns around dramatically, as July 4th um, gets closer, uh, it is our 250 year old uh, birthday party as a country and we think there's going to be a lot of optimism around that period. Uh we hope that the administration gets what it wants in terms of the Clarity Act being passed by July 4th. That would be a boon for the uh crypto asset ecosystem.

[00:12:50]And we also of course uh pray, hope and pray that the Iran war and whatever it is right now that it is done and that oil prices are resolving on the downside of expectations inflation as well which should drive consumer sentiment higher. Uh we certainly think that the administration is trying to foster this scenario uh because of the midterm elections. Uh time is short and takes a long time for perceptions to change. But maybe our birthday party uh 250 years old uh as an independent country uh will help the process along this time.

[00:13:36]>> On the Clarity Act, she hopes it passes by July 4th. Now, that's not just a policy wish. If it passes, it's a structural unlock for the entire crypto asset ecosystem in the United States and potentially the world. The White House is actively targeting July 4th for Congress to pass the Digital Asset Market Clarity Act. The administration's timeline calls for Senate Banking Committee markup this month, a Senate floor vote in June, and House passage before the deadline. Patrick Wit, executive director of the President's Council of Adviserss for Digital Assets, described it plainly. There's not a lot of slack left in the rope right now, but it's an achievable timeline. The honest version of this is that it's not guaranteed. Galaxy Digital's head of research estimated the odds of the Clarity Act becoming law in 2026 at roughly 50/50, possibly lower, citing not one single issue, but the sheer number of unresolved questions that must be settled in sequence under severe time pressure. Poly market odds for the bill being signed into law this year have fallen to around 47% down from 82% in February. So, what does that mean for Bitcoin specifically? Two things. First, even without the Clarity Act passing, Bitcoin ETFs are already operating. The institutional on-ramp already exists.

[00:14:43]The bill would make that on-ramp wider, not build it from scratch. Second, if the bill does pass, the assets most directly impacted would not necessarily be Bitcoin, which is already fairly well regulated as a commodity. The larger unlocks would be for altcoins and DeFi protocols that currently sit in legal uncertainty. Bitcoin's regulatory path is actually cleaner than most of the broader crypto market, which is part of why institutional money has been moving there. First, Cathy Wood is also pointing at something else in the segment that most people skipped over.

[00:15:11]The US midterm elections. The administration once wins. The crypto industry has become a significant political constituency. The Genius Act, which covers stable coin issuers, already passed. Senators from both parties have reached a compromise on stable coin yield provisions and the legislative momentum is real even if the timeline is tight. The political incentive and the institutional incentive are now aligned in a way they weren't 3 years ago. That alignment is new and that alignment is what Bitcoin has been waiting for. Now, here's the summary of everything Cathy Wood laid out. The 30-year base breakout she describes in capital spending is real and it is documented. The metals to gold ratio turn is a soft signal, not a confirmed one. The Bitcoin to gold rotation is directionally supported by the data but hasn't completed its case.

[00:15:55]And the Clarity Act is genuinely important to the long-term ecosystem, but isn't yet law and carries meaningful legislative risk. What she's right about cleanly, the macro environment has shifted. The people buying Bitcoin right now are not the people who bought it in 2017. They have longer time horizons and larger balance sheets, and they're buying through regulated vehicles. That changes the risk profile, not to zero, but structurally. That's it for today.

[00:16:18]See you in the next one.