Cathie Wood built ARK Invest’s Bitcoin case on the idea that Bitcoin is programmable, borderless, resilient to inflation, and will eventually become the dominant global currency layer for payments.
The latest version of this discussion acknowledges that stablecoins have reached the payments side first.
In a recent interview with The Rollup, ARK’s CEO said that the stablecoin has taken over some of the role that ARK once expected Bitcoin to play in emerging market payments. At the same time, institutions in the ETF era appear to have fallen on average during drawdowns, softening the intensity of the booms and busts that defined previous cycles.
The actual value of stablecoin payments made by McKinsey and Artemis is approximately $390 billion annually, or approximately 0.02% of global payments. Stablecoins have absorbed much of the trading lane for cryptocurrencies in a market where Bitcoin once competed for a role.
As of April 27, the stablecoin market capitalization exceeded $320.6 billion, an increase of over 56% since the beginning of 2025, with USDT accounting for 59.16% of the market, according to data from DefiLlama.
Retail cryptocurrency activity in Venezuela is primarily operated in stablecoins, with USDT accounting for 90.2% of active Binance P2P Venezuelan Bolivar listings and Bitcoin accounting for 1.9%, according to TRM Labs’ Q1 Implementation Report.
In Brazil, around 66% of cryptocurrency trading volume is conducted via USDT, compared to 11% for Bitcoin, with officials pointing out that stablecoins primarily function as a means of payment.
TRM found a similar pattern in Iran. In Iran, USDT operates as a de facto savings and payment railway under currency restrictions. Stablecoins pegged to the US dollar processed $274 billion in retail transactions through crypto asset service providers in March 2026 alone.
The payment lanes that Wood once saw as Bitcoin’s future are now stablecoin infrastructure, as evidenced by data from a stressed and capital-constrained market.
Bitcoin new lane
What stablecoins leave behind Bitcoin is arguably a better seat. As stablecoins absorbed discussions of transactional utility, Bitcoin consolidated around scarcity, institutional allocation, and macro reserve positioning.
CoinShares’ latest weekly report shows that inflows into crypto asset investment products reached $1.2 billion, the fourth consecutive week of positive growth and the third consecutive week of more than $1 billion.
Of this amount, Bitcoin accounted for $933 million, Ethereum accounted for $192 million, and Solana accounted for $31.8 million. Total assets under management rose to $155 billion, the highest level since February 1.
At the same time, Strategy’s April 27 SEC filing shows that an additional 3,273 BTC were purchased between April 20 and April 26, for a total of 818,334 BTC, for a total cost of $61.8 billion.
According to a report by CME, the average daily trading volume of cryptocurrencies in the first quarter increased from 191,000 contracts to 310,000 contracts compared to the same period last year, and the average daily open interest increased by 25% compared to the first quarter of last year to 313,900 contracts.
Farside Investors’ daily ETF data is actually the clearest demonstration of Wood’s “averaging” theory, as the U.S. Spot Bitcoin ETF recorded nine consecutive positive sessions from April 14 to April 24, with total inflows exceeding $2 billion.
Financial institutions bought through the correction, held and added through the volatility. The nine sessions are behind Wood’s argument that ETF holders are more sticky.
cycle questions
Wood’s paper comes ahead of evidence that institutions may have completely restructured their four-year cycles.
According to a NYDIG study, as of the fourth quarter of 2024, individuals accounted for 74% of assets under management in Spot Bitcoin ETFs, while institutional investors and professional advisors accounted for 26%.Although their share is expanding, their holdings are still small.
NYDIG’s February 2026 note argued that Bitcoin’s recent decline still conforms to a cyclical pattern, even if it appears more orderly.
While the ETF era has made marginal buyers more institutional and macro-responsive, retail still generates sufficient sales volume through drawdowns to drive cyclical movements.
Glassnode’s April 22nd report adds a layer of market structure, noting that Bitcoin has regained its true market average of $78,100, with a cost basis for short-term holders of $80,100 as the upper limit of resistance for the time being.
Spot demand showed an early recovery even as ETF flows turned modestly positive again and realized gains for short-term holders surged to $4.4 million per hour, nearly triple the $1.5 million benchmark that marked the country’s all-time high this year.
Glassnode also noted that Binance’s cumulative volume delta has driven much of the recent spot buying, while Coinbase’s activity remains subdued. Coinbase most directly proxies US institutional spot demand, so the current bid is genuine and driven more by offshore and mid-tier flows.
two cases
A strong lawsuit against Mr. Wood’s paper has been filed with the Federal Reserve.
If the April 28-29 FOMC meeting passes without adding new macro stress, weekly inflows remain close to or above $1 billion, Coinbase’s spot participation closes the gap with offshore venues, and Bitcoin clears $80,100 on the back of consistent absorption, Wood’s assertion that “financial institutions are softening the cycle” becomes visible in the price structure.
A market absorbing $4.4 million per hour in realized profits without breaking the reuse average would demonstrate exactly the depth of demand that Wood describes.
The model published by ARK predicts that Bitcoin will reach around $710,000 in the base case and $1.5 million in the bull case by 2030, but this goal only holds if the institutional ownership theory compounds over multiple cycles.
Bears maintain a four-year cycle. If the Fed retightens monetary conditions, the weekly flow streak breaks, and Glassnode’s realized profit warning plays out at $80,100, the recent move will resolve as a rise in distributions.
NYDIG’s view that the market remains cyclical, that retailers still own a large portion of the ETF float, and that the cyclical boom-bust mechanism remains stronger than institutional depth may be a good fit for Wood’s framework at this point.
Stablecoins would still have won in the payment lane, but the halving cycle still dominates the price structure, with ownership composition playing a secondary role.
Total assets under management were $155 billion, 41% below the October 2025 peak of $263 billion, indicating a large amount of unwound institutional exposure above current levels.
| scenario | what happens | main signal | What it means for Bitcoin | What it means for Wood’s paper |
|---|---|---|---|---|
| bull case | Fed passes without adding new macro stress, recent demand rebuilding holds, Bitcoin absorbs profit-taking near resistance | Weekly inflow of virtual currency investment products remains at or above the level 1 billion dollars; Coinbase’s spot participation will close the gap with offshore venues. bitcoin clear $80,100 Consistent absorption. Realized profits continue to rise without breaking the collection average | Bitcoin has moved from a “trial rally” to a more durable institutional demand regime, with ownership composition starting to matter more than the old halving reflex. | Financial institutions are easing the cycle, supporting Wood’s argument that buyers in the ETF era are more sticky than individual holders in previous cycles. |
| basic case | The Fed is largely neutral, stablecoins continue to win in the payments lane, and Bitcoin demand remains positive but uneven. | Weekly inflows remain positive but unstable. Demand for ETFs continues to grow, but not explosively. Bitcoin remains on top $78,100 However, it is difficult to definitively clear it. $80,100;Offshore and mid-tier demand remains stronger than Coinbase-led institutional spot purchases | Bitcoin continues to be supported by macro and institutional flows, but the price structure still appears to be in transition rather than a complete reset | Partial validation of Wood: Paper fragmentation is real, but institutions have not yet completely restructured their cycles |
| bear case | The Fed tightens margin requirements, the flow streak breaks, and increased profit-taking turns the rally into a distribution. | Weekly inflows are below recent streaks. Glassnode realized profit warning coming soon $80,100;Bitcoin loses support $78,100; Demand for ETFs will fade. Retail selling pressure becomes dominant again | Markets return to more familiar cyclical patterns, with ownership structure still secondary to drawdown dynamics | Supports NYDIG’s view over Woods: Stablecoins may be receiving payments, but financial institutions are not yet in the cycle |
| Structural split results | Bitcoin remains a reserve asset while stablecoins continue to dominate trading usage, regardless of short-term price trends | Stablecoin market capitalization continues to exceed $320 billion; USDT maintains an overwhelming share in the stressed payment market. Bitcoin products continue to account for the majority of institutional allocation flows | Cryptocurrency “money” theory becomes specialized: stablecoins handle payments, Bitcoin handles scarcity and balance sheet demands | Confirming Wood’s most enduring contribution: Bitcoin has not lost its theory, but has been narrowed down to a cleaner institutional and reserve asset role. |
What splitting actually means
Wood’s most lasting contribution to the current debate is his argument that Bitcoin’s original financial ambitions are divisive.
Stablecoins functioned as dollar rails in capital-constrained markets, while Bitcoin became a rare and difficult-to-access asset with large institutional balance sheets and regulated products.
This division is clearer and may prove more defensible.
Bitcoin can justify its base case price of $710,000 on the basis of reserve assets and institutional allocation alone.
By absorbing the utility case of transactions, the stablecoin layer alleviates competing demands on Bitcoin’s identity, a cleaner store of value position, and a payments infrastructure that keeps capital circulating in the cryptocurrency without Bitcoin playing all roles at the same time.
The Fed’s decision on April 28-29 will tell the market whether institutional bids, reconstituted over four weeks, can absorb the rise in profit-taking that Glassnode has already called.
(Tag translation) Bitcoin
