A lot of people are talking about fees, and I'll get to that. But there are three competitive advantages that I think are very important. One is our infrastructure and operations. Our partner, 21 Shares has built this infrastructure and been operating 40 different funds through booms and busts, through halvings and forks and airdrops, you know, and through periods that the ETF industry just has never seen. So our infrastructure is battle-tested.

The second is research. As you know, we give all of our research away. Our first blog on Bitcoin was the year of our founding, 2014. Our first white paper, Bitcoin, Could It Serve the Three Roles of Money, we did in collaboration with Art Laffer in 2015. And we gained our first exposure in Bitcoin at $250 and have never left it.

We think the story has just begun. So we've been putting prolific research out there. And now we have a Bitcoin monthly report and a Bitcoin brainstorm monthly. So we continue to give our research away, as does our partner, 21 Shares.

And then the third-- and this is not to be underestimated-- the third competitive advantage we have is a sales force that started selling our exposure to Bitcoin in 2016. That's when we partnered with Resolute Investment Management. And I remember in the early days, they were saying, oh, my goodness, what is this? What's Bitcoin? And so they had to figure out what Bitcoin was, and they paid a lot of attention to our research. And they have developed conviction. I mean, Bitcoin's been a marvelous investment.

JULIE HYMAN: Yes. Although sometimes a white knuckle one. Asset has gone up and down. You said at the beginning that you hope that you will be one of the winners here. I mean, if you look out a year, five years from now, do you think there will be 11 spot Bitcoin ETFs? Do you think some of them will have closed?

CATHIE WOOD: I don't think there will be 11 spot Bitcoin ETFs. Some may close. Some may be consolidated into bigger companies. The more pure play companies may be bought out by the larger players who need more of that expertise in-house. So I do think the process of closing and consolidation will take us down to three, maybe four, but more likely three.

JULIE HYMAN: And you were talking about the reasons that people might want to buy your product over sum of the others. But as a lot of people are going to look at the fees and they're going to gravitate towards the cheaper end of the spectrum. You guys are on the cheaper end of the spectrum. Is that a big selling point as well?

CATHIE WOOD: Yes. Well, at 21-- and that has significance-- our partner is 21 Shares. And of course, the number of Bitcoin that will ever be minted will not go past 21 million, so some significance there. We are not looking to maximize profit on this spot Bitcoin ETF. We are looking at Bitcoin as a public good. It is essentially, from a technology point of view, going to be the financial superhighway of the internet.

This Bitcoin blockchain technology is what the developers did not build into the internet in the early days, in the early '90s. Why? Because no one ever dreamed that commerce or financial services would take place on this network. Now, finally, we're going to have a native currency in the internet.

And it will take out a lot of middlemen because it is a peer-to-peer network. So we want to give investors as much access and exposure to Bitcoin. We don't want fees to get in the way. And of course, ETFs are extremely accessible. So we're pretty excited to be part of the ecosystem and offering a spot Bitcoin ETF.

JULIE HYMAN: Yeah. That's really interesting, what you're saying about the motivation behind doing this. I am curious, Cathie, how you're invested then in Bitcoin right now, right? I know, of course, that you have exposure through companies like Coinbase, which is the top holding in your benchmark fund.

Block at number six, also a way to get into that. You used to own shares in Grayscale , which is now one of your competitors in the spot Bitcoin ETF market. So I know you love Bitcoin, right? So what are the ways besides what I mentioned that you're getting exposure right now?

CATHIE WOOD: Well, you'll see that we did-- even before today, we scaled out of GBTC as the discount narrowed so dramatically into ProShares Bitcoin futures. So let's say as a first stop, I can't talk about what we are doing or are going to do in the future, but logic would logic would suggest that we'd be making another move at some point. So we will not lose exposure to Bitcoin.

We're probably more excited about the possibility of price appreciation now that despite the controversy, the SEC has given a spot Bitcoin ETF the green light. I think finally, institutions will feel more comfortable stepping in. And what's so interesting right now is that already outstanding, there are, I think, it's 19.6 million Bitcoin. There will never be any more than 21 million.

15 million of that 19.6 are in what we call strong hands. Their wallets have not moved Bitcoin in 155 days or more. That's 75% of the outstanding. So now, we believe there's going to become as institutions enter real scarcity value. And each dollar moving in will have more of an outsized impact now than it did before we got the green light.

JULIE HYMAN: Cathie, I want to ask you about one institution that still doesn't want anything to do with these products. And that's Vanguard, which told us in a statement that the spot Bitcoin ETF will not be available for purchase on the Vanguard platform. And we're talking about an institution with, what, $7 trillion under management? What do you make of that decision?

CATHIE WOOD: Well, consider the source, of course. I think it's a terrible decision. I think it's a strategic blunder. And what Vanguard is doing is basically saying, you know, the world's not going to change. These new financial rails are not going to be successful. We're still going to have seven middlemen between merchants and consumers, each one taking a toll.

And we just don't think that's going to prove correct. Truth always wins out. Innovation solves problems. There's a lot of friction in the financial system. And we believe that Bitcoin, blockchain technology generally are going to take a lot of the friction out of the system.

The other reason I think this is a terrible mistake is, they're going to deprive the investors who stay with them of really the first global, decentralized, private, no government oversight, rules-based-- critical phrase there-- monetary policy, monetary system in history.

My mentor, Art Laffer-- you may know him from the Laffer curve. He's also a very scholar-- he said, this is what I have been waiting for 50 years since they closed the gold window in 1971. He is so excited about this new asset class.

And that is the other mistake I think that Vanguard is making. It's depriving its clients of access to a new asset class. And what do we know about new asset classes? Well, if it's truly non-correlated or exhibits very low correlation of returns to other assets, then what a diversification into this new asset class will enable is increased return per unit of risk.

I think that advisors have a fiduciary responsibility to look at this new asset class. And to the extent they're working with Vanguard, they will be prohibited. So again, I think it's a strategic blunder. But again, we're all about disruptive innovation. That's all we do. And this is the most profound disruptive innovation taking place in the world today.

JULIE HYMAN: Cathie, as you look ahead-- and I know you've got some big numbers and projections for Bitcoin. I believe 600,000 per Bitcoin is your base case here-- what's the biggest risk to Bitcoin prices?

CATHIE WOOD: Well, yes, our base case is roughly $600,000. Our bull case-- and we think the probability of the bull case has gone up now that institutions have the green light-- our bull case is closer to $1.5 million in the next 10 years. So the biggest risk we were running was our regulators chasing innovation from American shores.

And so that was the biggest risk we were concerned about. I think after 2022 and all the crises we saw back then, including the bankruptcy and unwinding and ultimate bankruptcy of FTX, that actually proved the case for Bitcoin. It was interesting. Sam Bankman-Fried did not like Bitcoin.

Why didn't he like it? Well, it's a completely decentralized network. It's completely transparent. You can watch wallets move Bitcoin from one address to the other. And you look at FTX, it was completely centralized, completely opaque, and it turned out completely fraudulent.

So I think in terms of the risks to Bitcoin, the regulators have been so staunchly opposed-- mostly Gary Gensler, I would submit, but there is another regulator opposed-- that I think we have studied and done as much due diligence about the health of this network, that's why we put out a Bitcoin monthly, that it would be very difficult to perpetrate fraud in the base layer of Bitcoin.

Any of the hacks you've heard about are on applications built on top of the base layer. And those are software errors that enable the hackers in. But the base layer, which is the monetary system after all has not been hacked. So I think that the regulators, while it was very frustrating, and while the courts had to make some rulings in here, the regulatory resistance I think has hard-coded, for want of a better word, the security and safety of the network.

JULIE HYMAN: Yeah. Well, we'll see how the trajectory goes now that we have these new products. Cathie Wood of ARK Invest, thank you so much for joining us to talk us through the new products and what might happen with prices. Appreciate it.

CATHIE WOOD: Thank you so much, Julie. I always love being on your show. You do great research.

JULIE HYMAN: Well, thank you. Appreciate it.