Benzinga - Ark Invest CEO Cathie Wood is known for making outlandish predictions about cryptocurrency.
The predictions, which would result in small amounts of money appreciating into millions of dollars, are unlikely to come true, but they are still interesting to consider.
Wood spoke at an investor day in New York in March, noting that the price of Bitcoin could reach $3.8 million by 2030.
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"Last year we put out our bull case for Bitcoin. It was $1.5 million. With this institutional green light that the SEC [Securities and Exchange Commission] has provided, kicking and screaming though it did, the analysis we’ve done is that if institutional investors were to allocate a little more than 5% of their portfolios to Bitcoin, as we think they will over time, that alone would add $2.3 million to the projection I just gave you," Wood said.
According to Wood, Bitcoin could go as high as $3.8 million if institutional investors were to begin investing heavily in it. While the analysis is likely correct, it is unlikely that institutions would put 5% of their portfolios into Bitcoin within six years. Most institutions are not invested in Bitcoin at all, much less 5% of their portfolio.
However, institutional investment is growing, particularly because of the approval of spot exchange-traded funds (ETFs) in January. This has resulted in the most successful ETF launch in history, attracting tens of billions in investment. While the ETFs have allowed institutions to access Bitcoin, Wood is likely overzealous regarding the level of institutional adoption by 2030.
Wood also highlighted the importance of the Bitcoin halving, which occurred in mid-April, as a further catalyst for the price. The halving has not resulted in any short-term price increases. However, it may lead to new highs, particularly if the Bitcoin cycle hypothesis holds up. Wood's forecast also would include the next halving, expected to occur in 2028. While the halvings could serve as price catalysts, it is unlikely that they will bring Bitcoin to the predicted $3.8 million.
Wood has a strong conflict of interest with her Bitcoin projections, as Ark launched its own spot Bitcoin ETF in January. By getting investors excited about the future of Bitcoin, she could attract more inflows to her ETF.
If Wood is correct and Bitcoin does reach $3.8 million by 2030, an investment of $1,000 would be worth over $60,000. This would result in a compound annual growth rate (CAGR) of over 100%.
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