Bitcoin (Cryptography: BTC) At the time of writing, the market capitalization is approximately $1.9 trillion. This represents more than half of all cryptocurrencies in circulation, currently at $3.2 trillion.
Cathie Wood is the founder of ARK Investment Management and operates several investment funds focusing on innovative technologies, including cryptocurrency, electric vehicles and artificial intelligence.
ARK issued a forecast in 2023, suggesting that Bitcoin could reach a price of $1.48 million by 2030, representing a potential profit of around 1,400%. But Wood gave even bigger predictions last year, meaning Bitcoin could rise 3,800% over the long term.
Bitcoin recently hit a high of over $109,000, but that has recedes a bit. So how realistic is Wood’s prediction?
Image source: Getty Images.
May 22nd is officially known as Bitcoin Pizza Day, as the date Florida man paid for two pizzas in 2010 using 10,000 bitcoins. These 10,000 coins were worth around $41 at the time, but today they are worth $1 billion.
It was the first known real-world transaction to use cryptocurrency, and many enthusiasts believed it was the beginning of a Bitcoin journey to exchange Fiat money one day. Bitcoin is not yet known as a currency among consumers, and only 7,040 companies around the world accept it as a payment for goods and services. Instead, most Bitcoin demand actually comes from today’s investment community.
Bitcoin has a fixed supply of 21 million coins that will not be fully mined or created until 2140. They also use a secure system of records called blockchains, which are completely decentralized and therefore cannot be controlled. Everyone, company, or government. These features are why investors view Bitcoin as a good value store, and are kind of like a digital version of gold.
The idea was somewhat legalized last year when the Securities and Exchange Commission approved funds (ETFs) traded on dozens of Bitcoin exchanges. These allow financial advisors and institutional investors to purchase cryptocurrencies in a secure, regulated way.
However, it is important for investors to remember that they buy Bitcoin in the hopes of someone else paying a higher price in the future, not because they produce something specific or valuable.
As a result, people can legally make the argument that there is no real value. But we don’t deny that incredible profit. It has grown by 42,320% over the past decade, crushing all other asset classes, including stocks, real estate, gold and more.
The story continues
Bitcoin price data by YCHARTS.
Ark points out eight potential reasons why Bitcoin continues to climb. In my opinion, the following three make the most sense:
Digital Gold: ARK believes that 20% to 50% of investors would normally allocate to gold could instead enter Bitcoin. This is a reasonable prediction, as it can be easily moved digitally compared to physical gold.
Institutional Investment: This is linked to the above points. Institutional investors who view Bitcoin as a valuable store may be restricted directly from investments in cryptocurrency, as it may be dangerous to hold it (digital wallets can also be hacked) ). To solve that problem, ETFs open Bitcoin to a whole new pool of investors.
National Treasury: Most governments store billions of dollars of physical gold, and Ark believes they will ultimately retain reserves in Bitcoin. President Donald Trump supports the idea for the US government, which could lead to a new tsunami of money that flows into cryptocurrency.
In my view, the other five catalysts do not hold that much water. For example, ARK predicts that high-net individuals will own Bitcoin as they are more difficult to seize than cash or other assets, but the US government has billions of dollars worth of cryptocurrencies over the past few years. I know that it was confiscated.
Bitcoin has been trading at around $98,000 at the time of writing, and the Ark Bull case is seeking a price of $1.48 million by 2030. This means a potential benefit of around 1,400%.
However, at the Bitcoin Investor Day event in March 2024, Cathie Wood said that if institutional investors are only allocated 5% of their managed assets, they will ultimately guarantee a price of $3.8 million. . She believes ETF has laid the foundation for the results.
Bitcoin is priced at $3.8 million per coin, with a fully diluted market capitalization of $79.8 trillion. This means that Bitcoin is almost 23 times more than the world’s most valuable Apple, currently worth around $3.5 trillion. It also represents more than twice the annual production of the entire US economy. That’s about $29.7 trillion.
Bitcoin ETF currently holds assets worth $117 billion. That’s just $1.9 trillion in cryptocurrency’s current market capitalization. Given that ETFs only exist for a year, it is an impressive achievement, but it can take decades to generate enough influx (at the current pace) to justify the prediction of wood It has sex.
In my opinion, the more achievable long-term price target for Bitcoin is $919,000. This leads to a fully diluted market capitalization of $19.3 trillion. It represents an incredible potential benefit of around 840% for investors buying Bitcoin today.
Of course, it’s just a speculative asset, so there’s absolutely no guarantee that Bitcoin will continue to rise in value at all. That’s something investors should keep in mind before taking their position.
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Anthony di Pizio does not occupy any of the stocks mentioned. Motley Fool has been working and recommending Apple and Bitcoin. Motley Fools have a disclosure policy.
According to Cathie Wood, one unstoppable cryptocurrency can be purchased before it rises 3,800%, according to Cathie Wood, issued by one Motley Fool.
