Cathie Wood isn’t known for playing it safe. The maverick head of Ark Investments and a pioneer in thematic investing is no stranger to making big bets, and even bigger bets. She remains an ardent supporter of Tesla, championing the struggling electric car maker, believing it could capture $5 trillion of the $10 trillion robotaxi market in the future.
She is also an avid supporter of cryptocurrencies and a strong believer in Bitcoin (CRYPTO: BTC), the granddaddy of all cryptocurrencies. What is her prediction here? By 2030, Bitcoin will reach $1.5 million per coin, a return of almost 2,400% from today’s price. She recently went further, stating that if institutional investors allocated 5% of their funds to Bitcoin, it would add $2.3 million to her forecast, for a total of $3.8 million per coin. What makes her believe that?
Institutions are what will bring big changes to Bitcoin.
Bitcoin is no longer an investment wasteland. While it is certainly still a volatile asset, the market is much different than it was just a decade ago. In recent years, there has been a large influx of capital from institutional investors, which has provided further stability. Wood himself helped promote change.
Several financial institutions have been participating in the market for some time, but even more have become involved since Wood lobbied the Securities and Exchange Commission to approve a spot Bitcoin exchange-traded fund (ETF). are. The first batch of 11 such ETFs was approved in January this year. This was a big moment for the industry, as these ETFs offer a much easier way to access Bitcoin for investors large and small. Many brokerages that do not offer crypto trading will be happy to help you trade spot Bitcoin ETFs.
Wood believes that once people start thinking about Bitcoin as a stable and safe asset rather than a risky and volatile asset, institutional investors will move more of their portfolios into the cryptocurrency. are.
Currently, most large financial institutions have less than 1% of their portfolio in “digital assets,” and 16% have less than 0.1% (0 was not an option in the survey). Still, recruitment continues. Even a modest exposure by institutional investors, say 1% or 2%, would significantly increase the price of Bitcoin, especially if some of Bitcoin’s other catalysts materialize.
Adopted as digital gold
The evolution of its image from a speculative asset to something more stable has led some to refer to Bitcoin as “digital gold.” It is rare, it takes effort to “mine” it, and its supply is finite. All of this together means that they tend to increase in value over time.
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These qualities and more have led Larry Fink, one of the world’s most influential and powerful investors, to call Bitcoin a “legitimate financial instrument.” He believes it can be a great asset if you “believe governments are devaluing their currencies.”
However, unlike gold, Bitcoin is easy to carry and store. Do you know how difficult it is to send $10,000 worth of gold bars to someone across the country? With Bitcoin, you can do it in seconds. All of Fort Knox’s gold values can be stored on a flash drive.
As more people view Bitcoin as digital gold, it could fuel a large influx of capital, especially in times of economic turmoil. Wood said it could be used as currency in countries with runaway inflation, as a store of wealth by governments, as a remittance asset for cross-border payments, and as a cash equivalent by businesses. Other catalysts are mentioned.
It is clear that there are many ways Bitcoin can increase in value. The question is how much it will be appreciated. I think it’s highly unlikely that Wood’s $1.5 million goal and bullish $3.8 million will be realized by 2030, but she definitely makes an interesting case. I believe Bitcoin will easily outperform the market over the next five years and will be an important part of a diversified portfolio for those with a high risk tolerance.
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Johnny Rice has no position in any stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.
Ark Invest’s Cathie Wood says there’s one top cryptocurrency to buy before it soars 2,377%, originally published by The Motley Fool.
