Cathie Wood To Elon Musk: Blockchain Technology Will 'Bend The Curve' On Inflation

"Strong deflationary forces" at play have the potential to bend the inflation curve, Ark Invest CEO Cathie Wood said in a tweet in response to Tesla Inc TSLA CEO Elon Musk. 

What Happened: "Inflation has flared in response to COVID-related supply chain bottlenecks and oil supply constraints but, IMHO (in my humble opinion), the powerful and converging deflationary forces associated with AI, energy storage (EVs!), robotics, genomic sequencing, and blockchain technology will bend the curve," Wood said in response a Musk tweet on Tuesday.

Inflation has flared in response to COVID-related supply chain bottlenecks and oil supply constraints but, IMHO, the powerful and converging deflationary forces associated with AI, energy storage (EVs!), robotics, genomic sequencing, and blockchain technology will bend the curve. https://t.co/DxGLRWe2P6

— Cathie Wood (@CathieDWood) October 26, 2021

Her comments are part of a larger debate sparked by Twitter Inc TWTR and Square Inc SQ CEO Jack Dorsey, who raised an alarm regarding the rapid onset of hyperinflation.

Wood expanded on the notion that any rise in inflation will likely be short-lived, evidenced by the declining levels of velocity, or the rate at which money turns over year-over-year.

“If they expect lower prices, most consumers/businesses will defer purchases, exacerbating a decline in the velocity of money. Despite the burst in cyclical inflation during the last year, velocity is hovering at low levels,” said Wood.

“I am struck by the behavior of millennials who, at the margin, are sacrificing short-term consumption to pay down student loans or invest in crypto and other assets,” she added.

Photo by Frederick Warren on Unsplash.