Star investor Cathie Wood has a message of reassurance for Bitcoin investors amid the din of ever harsher regulatory rhetoric: officials won’t be able to make the largest cryptocurrency go away.

Tough talk against digital tokens from China and calls for greater scrutiny in Europe and the U.S. have contributed to a slump in Bitcoin, but Wood said the virtual currency is “already on its way and it’ll be impossible to shut it down.”

Regulators “will be a little more friendly over time” toward cryptocurrencies out of fear of missing out on the innovation provided by the sector, Wood said at the Consensus 2021 conference organized by CoinDesk.

The most high-profile recent broadside came from China. A push to rein in cryptocurrency mining there was partly triggered by concern over a surge in illicit coal extraction to deliver the power needed by the server farms underpinning Bitcoin. Billionaire Elon Musk also highlighted environmental risks in suspending Bitcoin payments at Tesla Inc.

Wood, founder of Ark Investment Management LLC, said that the focus on green factors likely led to a pause in institutional buying of Bitcoin. She has previously said she expects the token to surge longer term.

Bitcoin’s questionable environmental profile has eroded the argument that the token is bound to lure more mainstream investment, whether as an online store of value akin to digital bullion or for more speculative purposes.

Musk has backed an effort to shine a light on energy consumption by North American miners, including planned renewable use. But it will take years for many of the largest miners to recalibrate where they source their energy.

“Half of the solution is understanding the problem,” Wood said. “This auditing of what miners, certainly in North America, are willing to do around how much of their electricity usage is generated by renewables is going to bring that topic into stark relief, and will encourage an acceleration in the adoption of renewables beyond which otherwise would have taken the place.”

Ark Investment Management published a report last month saying cryptocurrency mining can drive investment in solar power and make more renewable energy available to the grid.

Capital-Gains Tax
On the stock market outlook, Wood said concerns about higher U.S. capital-gains taxes had hurt “high-volatility, high-multiple stocks,” but added those fears have eased amid increased chances of gridlock in Washington.

Ark’s funds have faced a tough time of late as a wave of selling swept across former market darlings in the technology sector amid a switch to less richly valued segments of the equity market. The firm’s flagship Ark Innovation ETF has slumped about 28% from its February peak.

Bitcoin was trading around the $38,000 level as of 12:41 p.m. in Tokyo, down some 40% from a record in mid-April.