Cathie Wood Says AI and Crypto Liquidity Squeeze Will Reverse Soon

Palantir 121% Revenue Jump Back AI Growth, Says Cathie Wood in Webinar

Cathie Wood thinks the current liquidity crunch that AI and crypto markets are currently facing will be short-lived, and that a relaxation of financial conditions will lead to a recovery that investors may already be looking forward to.

Liquidity Squeeze May Reverse in the Coming Weeks

ARK Invest founder Cathie Wood recently stated on X that the liquidity tightening affecting both AI and crypto markets “could reverse in the coming weeks.” 

Her comments follow persistent selling pressure tied to broader macro conditions, including U.S. Federal Reserve quantitative tightening and cautious risk sentiment across tech sectors.

Wood argued that markets seem to be “pricing in” an upcoming shift, signaling that investors expect liquidity to improve. According to her, this turn could ease pressure on innovation-led assets, particularly Artificial Intelligence and crypto-linked equities that have faced sharp volatility over the past quarter.

Source: Official X

AI Is Not in a Bubble, Says Wood

Responding to concerns that AI valuations are overheating, Wood reiterated a strong belief that technological aspects are still in their early growth phase. In ARK’s webinar, she highlighted a key data point:

• Palantir’s U.S. commercial revenue surged 121–123% year-over-year in Q3 2025, showing accelerating enterprise demand.

This growth, she said, contradicts the idea of an AI bubble. Although businesses might not achieve apparent productivity improvements as a result of reorganization schedules, robust business adoption is an indicator of long-term force. 

cathie also mentioned studies that productivity effects lag several quarters behind technological integration, indicating that the economic effects have not been fully manifested.

ARK Invest Buying the Dip in Crypto-Linked Stocks

ARK Invest has been prolific in exposing itself to crypto-related firms even in the downturn, an indication of great belief in the recovery of the market. Recent purchases include:

• Coinbase (COIN)

• Block (SQ)

• Robinhood (HOOD)

• New stakes tied to Circle (stablecoin issuer)

Exposure to Bullish, a growing crypto exchange

ARK’s strategy aligns with Wood’s belief that crypto markets may soon benefit from improving liquidity and potential catalysts such as:

• Bitcoin’s upcoming halving

• Increased institutional adoption

• Post-election regulatory clarity in the U.S.

• A possible shift from quantitative tightening toward easing

Investors React With Mixed Opinions

While supporters praise Wood’s long-term vision, critics point to ARK’s earlier missteps—such as selling Nvidia before its rally. Yet many agree that AI’s current growth phase, especially on the consumer side, remains strong. 

The 24 November post authored by Wood highlighted that the AI story is only in its infancy, with consumer use of Artificial Intelligence thriving despite slow enterprise productivity results.

Comments to her posts are both positive and negative, and they indicate the controversy of Artificial Intelligence sustainability, crypto volatility, and the high-conviction strategy of ARK.

Conclusion

The stance blends optimism about digital demand with strategic positioning in crypto equities. While her outlook is bullish, investors should remain aware of macro uncertainty and inherent market volatility.