Cathie Wood and ARK Invest increased at the beginning of the covid pandemic due to the success of her great strategies. Her ARK Innovation ETF accumulated a return of 157 percent in 2020. With a firm that has a mission to invest in cutting-edge technologies, it is no wonder Cathie Wood also gives her clients exposure to cryptos.
My attention was caught by a research report, entitled Big Ideas 2022, that was recently published by ARK Invest. It had an incredible target price for Bitcoin: $1.36 million per coin by 2030. Based on the cryptocurrency’s most recent price of $40,500, which implies a huge increase of around 32-fold! And it is more than double Wood’s last target of $500,000.
Here is a closer look at why this popular investor is so very optimistic on Bitcoin.
ARK Invest’s big cost target is based on the Bitcoin adoption significantly increasing over the next several years. There were 8 main uses that were talked about in the report, with the detailed targets to be achieved by 2030.
They are: Bitcoin is used for half of global remittances. Excluding the leading 4 nations, BTC accounts for 10% of M2 money supply. It will be used for about 25% of bank settlement volumes in the United States. Bitcoin will represent 1% of the total national and state treasury reserves. High-net-worth people will hold 5% of their wealth in BTC. Institutional investors will put in 2.55% of their portfolios to BTC. It will represent about 5% of cash held on the balance sheets of S&P 500 businesses. Bitcoin will reach 50% of what gold’s value will be.
“Our research has suggested that Bitcoin has the potential to change monetary history by providing empowerment and financial freedom in a global, fair, and distributed way,” analyst Yassine Elmandjra said. While this statement could not be more unoriginal, as all crypto and Bitcoin enthusiast believes the same thing, what clearly stands out is the target price of almost $1.4 million per coin.
Because Bitcoin does not produce net income, free cash flow, or revenue, like a traditional corporation, it is nearly impossible to value. As a result, the best guess anyone can make is to try to predict its potential penetration in the global economy. I agree with the ARK company that the 8 scenarios are the most promising for Bitcoin, but it is really just a guess, how much the cryptocurrency really gets integrated into the financial system.