Cathie Wood is not one to play it safe. As the bold leader of Ark Invest and an innovator in thematic investing, she is accustomed to taking significant risks and making ambitious predictions. Wood remains a vigorous supporter of Tesla, maintaining her faith in the beleaguered electric vehicle manufacturer with the conviction that it stands to dominate a future $10 trillion robotaxi market, capturing a substantial $5 trillion share.
She is also a fervent supporter of cryptocurrencies, particularly Bitcoin (CRYPTO: BTC), which she regards as the cornerstone of the cryptocurrency space. Wood forecasts that Bitcoin will soar to $1.5 million per coin by 2030, representing an astonishing nearly 2,400% increase from its current value. Recently, she even suggested that if institutional investors allocate 5% of their portfolios to Bitcoin, this would elevate her estimate to $3.8 million per coin. So, what fuels this optimism?
Institutions will drive Bitcoin’s growth
Bitcoin has evolved beyond its former status as the investment landscape’s wild west. While it remains volatile, it is markedly different from what it was just ten years ago. Recently, there has been an influx of institutional investment, bringing with it greater market stability. Wood has been instrumental in this shift.
Although some institutions have been involved with Bitcoin for a while, many others entered the market after Wood advocated for the Securities and Exchange Commission to approve spot Bitcoin exchange-traded funds (ETFs). This January saw the approval of the first group of 11 such ETFs. This was a watershed moment for the industry, as these ETFs provide a more accessible means for both large and small investors to engage with Bitcoin. Brokerages that do not usually offer cryptocurrency trades are now facilitating trading for spot Bitcoin ETFs.
Wood posits that as perceptions of Bitcoin transition from viewing it as a risky, volatile asset to recognizing it as a stable and potentially safe investment, institutional investors will be inclined to increase their allocations in this cryptocurrency.
Currently, most major financial institutions allocate less than 1% of their portfolios to “digital assets,” with 16% holding less than 0.1% (0% was not an option in the survey). Despite this, adoption is on the rise. Even modest allocations of 1% or 2% by institutional investors could significantly enhance Bitcoin’s price, especially if some of Wood’s other triggers materialize.
Embracing the concept of digital gold
This shifting perception from speculative asset to something more stable has prompted many to describe Bitcoin as “digital gold.” Bitcoin is limited in supply, requires effort to “mine,” and possesses a finite nature. Collectively, these factors contribute to its tendency to appreciate in value over time.
Such attributes have led Larry Fink, one of the world’s most powerful investors, to label Bitcoin as a “legitimate financial instrument.” He believes it serves as an excellent investment option for those who “understand that governments are devaluing their currencies.”
In contrast to gold, Bitcoin is easily transferrable and simple to store. Consider the difficulty of sending $10,000 worth of gold bars to someone across the country; with Bitcoin, this transaction can be completed in seconds. The entire value of the gold in Fort Knox can be securely stored on a compact flash drive.
As more individuals begin to regard Bitcoin as a form of digital gold, this could initiate a substantial influx of investment, especially during periods of economic uncertainty. Wood identifies additional catalysts, such as its utility in nations experiencing hyperinflation, its acquisition as a wealth reserve by governments, its role in cross-border payments as a remittance asset, and its adoption as a cash equivalent by corporations.
It is evident that there are multiple pathways for Bitcoin to appreciate; the real question remains how much it will rise. While I view Wood’s target of $1.5 million and her bull case of $3.8 million by 2030 as overly ambitious, her reasoning is certainly thought-provoking. I believe Bitcoin is poised to significantly outperform traditional markets over the next five years and represents a valuable component of a diversified portfolio for those willing to accept higher risks.
Seize this second chance at a potentially profitable opportunity
Have you ever felt like you missed out on a great investment opportunity with top-performing stocks? If so, you’ll want to take note of this.
Occasionally, our expert analytics team issues a “Double Down” stock recommendation for companies they anticipate will see substantial gains. If you’re apprehensive that you may have already missed your opportunity to invest, now is the ideal time to act before it’s too late. The numbers tell a compelling story:
-
Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,266!*
-
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $43,047!*
-
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $389,794!*
At present, we’re issuing “Double Down” alerts for three outstanding companies, and opportunities like this may not come around again anytime soon.
Discover 3 “Double Down” stocks »
*Stock Advisor returns as of October 7, 2024
Johnny Rice holds no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool maintains a disclosure policy.
Originally published by The Motley Fool, the article titled 1 Top Cryptocurrency to Buy Before It Soars 2,377%, According to Cathie Wood of Ark Invest.
