Cathie Wood of Ark Invest continues to ratchet up her price forecasts for Bitcoin (CRYPTO: BTC). At the recent Bitcoin Investor Day event in New York City, Wood boosted her 2030 Bitcoin price forecast to $3.8 million from an already lofty figure of $1.5 million. Given today’s price in the neighborhood of $70,000, that would be an eye-popping gain of about 5,300% within just six years.
On the face of it, the prediction sounds outlandish. However, there are two key catalysts that could eventually make it a reality.
Institutional adoption
The primary factor pushing Bitcoin to previously unthinkable heights is stronger than expected institutional adoption. Quite simply, large institutional investors are waking up to the idea of Bitcoin as a stand-alone asset class worthy of inclusion in their portfolios. With the launch of the new spot Bitcoin exchange-traded funds (ETFs), they now have a regulated way to invest in Bitcoin without having to participate directly in the crypto market.
Image source: Getty Images.
The investor flows into the new spot Bitcoin ETFs since January have been nothing short of breathtaking. The top two spot Bitcoin ETFs have together accumulated more than $25 billion in customer assets in just over two months. And the new Ark 21Shares Bitcoin ETF (NYSEMKT: ARKB) hasn’t done too shabbily, either, with nearly $3 billion in assets under management. Granted, some of this money is coming from small retail investors, but the lion’s share is coming from institutional investors.
The big question, of course, is just what fraction of their assets these institutional investors will choose to allocate to Bitcoin over time. Right now, the prudent allocation range is viewed as 1% to 3%. But Wood thinks that this allocation will eventually rise to well over 5%. That percentage would be high enough, she asserts, to push Bitcoin past the $1.5 million mark.
Bitcoin as a financial superhighway?
For Bitcoin to hit its full potential, though, something more is needed. From my perspective, it’s highly unlikely Bitcoin can get to $3.8 million if people are just hoarding it and holding on for dear life. People actually…
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