Crypto investment company Ark Invest founder, Cathie Wood, has dumped all of the firm’s holdings of PayPal and showed 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 Miami Bitcoin 2022 conference which wrapped up on April 9.
The Lightning Network (LN) is a layer-2 solution for Bitcoin meant to facilitate faster and cheaper transactions. Financial technology company PayPal operates the payment app Venmo as a direct competitor with Block’s (formerly Square) Cash App.
“@ARKInvest has sold, completely got out of Paypal, whose Venmo is a big competitor to Cash App.
(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 drop PayPal for Cash App due to its more comprehensive approach toward digital asset wallet integration. She said that although Venmo has begun to accommodate Bitcoin (BTC), “it’s more of a follower of Cash App.”
“We tend to put our bets with who we believe will be the winners… As we consolidated our portfolios during a risk-off period, we chose Block over PayPal.”
Wood continued that her firm’s conviction in Cash App stems from what she perceives to be the organically-driven growth in users “as opposed to more of a top-down approach” from Venmo.
In general, Wood believes retail investors have driven the crypto market up to this point as she stated:
“I don’t think most institutional investors are positioned the way they ultimately will be. Retail has really led the charge here.”
Venmo currently boasts 70 million users and $850 million in profit compared to Cash App’s 44 million and $2.03 billion in profit in 2021 according to data from app tracker Business of Apps. The stark contrast in their ability to net profits could be another motivating factor for Ark’s assessment of the two brands.
Related: Bitcoin plumbs April lows as US dollar strength hits highest 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 would be able to automatically invest a portion of their direct deposits into Bitcoin.
Wood is a big Bitcoin believer who repeated her prediction in the interview that BTC would hit $1 million by 2030.
