Cathie Wood Sees Liquidity Relief Ahead, ARK Invest Doubles Down on Crypto and AI

Highlights:

• Cathie Wood says crypto shows liquidity stress, expects relief within a few weeks.
• ARK Invest spent millions on buying crypto stocks despite Bitcoin’s sharp decline.
• Wood insists AI growth is steady, not a bubble, citing Palantir’s strong gains.

ARK Invest CEO Cathie Wood said the recent liquidity problems in crypto and AI markets may get better in a few weeks. She expects three changes from the Federal Reserve before the end of the year. Bitcoin is trading below $92,000 after falling from $126,000 in October.

Wood Says Crypto Reflects Liquidity Conditions

Wood explained that crypto markets show when liquidity is tight. “It is interesting watching the crypto ecosystem really be a leading indicator when liquidity is ebbing and flowing,” she said during ARK’s November webinar.

In this recent webinar, I discuss why the liquidity squeeze that has hit #AI and #crypto will reverse in the next few weeks, something the markets seemed to buy, and why AI is not in a bubble. The 123% increase noted below was in Palantir’s US commercial business last qtr.

Watch… https://t.co/GdBZtEQcxM

— Cathie Wood (@CathieDWood) November 26, 2025

In November, Bitcoin fell below $90,000 for the first time since April. During the downturn, ARK Invest bought crypto stocks aggressively. The firm spent over $93 million in one day this week. On November 20 alone, ARK added $42 million to Bullish, Circle Internet Group, and BitMine Immersion Technologies.

Here's every move Cathie Wood and Ark Invest made in the stock market today 11/19 pic.twitter.com/gEJcqlwxXn

— Ark Invest Tracker (@ArkkDaily) November 20, 2025

Fed Actions and Treasury Cash Expected to Ease Liquidity

ARK Invest CEO said the three main liquidity pressures should ease soon. First, the Federal Reserve may stop quantitative tightening at its December 10 meeting. The government shutdown is over, and Treasury funds are back in circulation. “We think that source of a liquidity squeeze is behind us,” Wood said.

Interest rates are another factor, but Wood expects a rate cut in December. “We think we will get another cut in December, and that the Fed will shift from what seems to be a hawkish tone right now back into a more dovish tone as we approach that date,” she explained.

Prices are starting to show signs of easing. Oil for West Texas Intermediate fell below $60 per barrel. New home prices have been declining for about a year, and existing home price growth slowed to 1.5%. Ten-year Treasury inflation expectations remain near 2.5%, according to Trueflation.

Wood said inflation could fall more once tariffs fully pass through. Fed actions and returning cash should also ease liquidity. Crypto saw big outflows recently. US Bitcoin funds lost $254 million on November 17 after Bitcoin fell 30% from $125,100. Average spot ETF investors are now below their purchase price of about $89,600. ARK’s crypto holdings in flagship ETFs passed $2.15 billion in early November. ARKF holds 29%, ARKW 25.7%, and ARKK 17.7% in crypto. Wood keeps buying, showing her belief that financial system changes are just beginning.

ARK Invest CEO Says AI Offers Long-Term Growth, Not a Bubble

ARK Invest CEO said AI is not in a bubble like the tech and telecom boom twenty years ago. She noted productivity gains are slow, but AI change happens over time. Palantir’s US commercial business grew 123% last quarter, which shows long-term potential. ARK research director Brett Swift added that AI exposure is important for investors. ARK continues holding strong AI positions in its portfolios.