ARK Invest CEO Cathie Wood is one of the most popular crypto investors whose views on digital assets are closely watched by the industry.
While the veteran investor is best known for her bullish Bitcoin (BTC) prediction, her firm ARK Invest recently issued a bullish prediction on stablecoins .
Related: Cathie Wood sends strong prediction on Bitcoin
OUSD unlikely to displace USDC and USDT, ARK says
A stablecoin is a type of cryptocurrency designed to maintain a steady price by getting pegged to a "stable" asset. For instance, Circle Internet Group 's (NYSE: CRCL) USDC and Tether 's USDT are pegged 1:1 to the U.S. dollar. This is why such stablecoins are also called "digital dollars."
Lorenzo Valente, ARK Invest's director of digital assets, wrote a long post on X on July 8 in which he dismissed any such notion that the newly launched Open USD (OUSD) stablecoin threatens the dominance of USDC and USDT.
Open Standard's OUSD is backed by several banking and crypto giants like BlackRock , Visa , Mastercard , Coinbase , Aptos Labs , Solana , and Ripple . But Valente said the industry is "vastly overestimating" the new product.
In his note, Valente talked at length about the network effects of stablecoins. Such effects aren't created by logos but by liquidity, habit, collateral acceptance, integrations, brand recognition, market depth, settlement flows, and the fear of breaking what already works, he highlighted.
As OUSD will be a GENIUS Act-compliant stablecoin, it won't be able to share yield directly with users. In contrast, USDC offers a significant yield to holders, he underscored.
Though OUSD will share the reserve economics with the platforms and businesses that distribute and use the stablecoin, these consortium companies accrue value in other ways, and in many cases their core businesses depend on the existing liquidity and network effects of USDT, USDC, and other stablecoins, Valente highlighted.
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Binance, the world's largest crypto exchange, once had its own branded stablecoin, BUSD, but it had to shut down the project after regulatory pressure.
Binance currently holds $45 billion worth of USDT which is the most liquid counterpair on the crypto exchange, Valente underlined.
In fact, Binance's trading business is cemented by USDT liquidity, which it wouldn't want to disrupt, he added.
"That is a real network effect."
Valente said he doesn't consider OUSD to be irrelevant but considered the market excitement around it exaggerated. The market is overestimating that a newly launched stablecoin can overcome embedded liquidity, he added.
In response, Wood said that the network effects of USDT and USDC have been powerful and underlined that the firm considers that OUSD is unlikely to displace them.
As reported earlier, ARK Invest, along with SoftBank Group, was in talks to invest in Tether, but there is no further update on the deal.
As far as Circle is concerned, ARK regularly trades the publicly listed stablecoin company's shares.
Related: Cathie Wood expects a volatile Bitcoin uptrend
This story was originally published by TheStreet on Jul 13, 2026, where it first appeared in the MARKETS section. Add TheStreet as a Preferred Source by clicking here.
