KUALA LUMPUR (March 24): Ark Invest chief executive officer (CEO) Catherine Wood has said the traditional finance sector will be disrupted "in an enormous way" by developments in the blockchain space, adding that other industries will also likely be transformed by new applications arising from blockchain technologies.

During a webinar hosted by Affin Hwang Asset Management, Wood said these are some of the areas of Ark Invest's focus, which has outlined five innovation platforms, namely DNA sequencing, adaptive robotics, energy storage, artificial intelligence (AI) and blockchain.

"The combination of DeFi (decentralised finance), blockchain technology and digital wallets is going to hollow out traditional financial firms," she said.

Going further into the developments in the blockchain sector, Wood said that blockchain technologies are revolutionary in three ways, the first of which would be a money revolution, which involves Bitcoin, and Ether, the currency of the Ethereum network.

"These are the first global, private, digital, rules-based monetary systems in history. This is a big idea," she said.

"Secondly, we have the financial services revolution with the rise of DeFi and digital wallets, which will transform the industry. And thirdly, blockchain technologies are giving rise to the metaverse, which we think is the next generation of the internet," Wood added.

She also mentioned non-fungible tokens, which will be the first global, private, digital, and immutable property rights system, although she admitted that the technology is not perfect yet.

"I think many people are thinking about the metaverse as [video] games and so forth, but this is a much bigger idea than just games. We think it's going to impact every sector," she said.

Another segment that will see major disruptions, she said, is the energy sector, amid the pivot towards electric transportation.

Wood said Ark believes demand for oil will continue to fall in the years ahead, adding that the current high prices amid the oil supply shock will accelerate the destruction of oil demand.

"In fact, demand for oil is below where it peaked in 2019. Once the supply shock is over, we think the big surprise will be lower oil prices," she said.

Looking ahead, Wood said investment opportunities will arise whenever there is a convergence of new technologies, such as Tesla which is converging robotics, autonomous vehicles, energy storage and AI technologies.

She also noted another key convergence, which is happening around genomic sequencing, AI and CRISPR gene editing, which she believes will result in the next jump in healthcare as this would eventually cure diseases that were thought to be incurable.

"Disruptive innovation is highly deflationary. This deflationary pull is going to get bigger and bigger as these technologies scale," said Wood.