Benzinga - Founded in 2014, ARK Invest has rapidly become one of the largest asset management firms globally. Led by Cathie Wood, the company offers a variety of investment products and services, focusing heavily on innovation and technology. In early 2024, the firm partnered with 21Shares to launch a spot Bitcoin ETF (ARKB). The ETF and several others have been largely successful, attracting over $3.2 billion in AUM.
Following the ETF's launch, Cathie Wood has received significant attention for her predictions about Bitcoin's future price.
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"With this institutional green light that the SEC [Security 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 noted at an investor day conference in New York.
The new prediction is higher than at the start of the year. In January 2024, Wood stated that Bitcoin could hit $1.5 million by 2030 after "the probability of the bull case has increased with this SEC approval. This is a green light." Before approving the spot ETFs, Wood predicted that Bitcoin could reach $1 million by 2030.
Wood's investment thesis on Bitcoin relies on significant levels of institutional adoption. While it is plausible that if institutional investors allocate 5% of their portfolios to Bitcoin, the price could reach $3.8 million, it is unlikely to happen by 2030. Although institutional adoption has increased significantly in 2024, unprecedented changes in the institutional landscape would be required for this to occur.
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The prediction for 2030 also factors in the next Bitcoin halving, expected to occur in 2028. Historically, Bitcoin halvings precede higher highs followed by higher lows. If this pattern continues into 2030, the price could peak around 2029 or 2030, potentially aligning with Wood's price prediction.
If Wood is correct and Bitcoin reaches $3.8 million, a $100 investment in Bitcoin today would be worth $5,510 in 2030. This translates to a compounded annual growth rate (CAGR) of over 95%.
While the prediction is bullish, Bitcoin's 14-year CAGR is well over 220%, so it is not entirely out of the question. However, as Wood noted, it would likely require substantial institutional investment.
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