1 Unstoppable cryptocurrency with a 5,300% increase by 2030, according to Cathie Wood

By | March 30, 2024

Cathie Wood is the head of Ark Investment Management, which manages fourteen exchange-traded funds (ETFs) focused on technological innovations. They include everything from artificial intelligence (AI) to electric vehicles and cryptocurrency.

Ark is extremely optimistic about the world’s largest cryptocurrency, Bitcoin (CRYPTO: BTC). The company’s official research suggests the coin could return 2,000% by 2030, but Wood himself just released a new price target that points to a potential upside of more than 5,300%.

Bitcoin is currently trading near an all-time high and investors are as excited about the prospects as ever, but is Wood’s prediction realistic?

A gold coin with the Bitcoin symbol on it.

Image source: Getty Images.

Bitcoin is a unique asset

Bitcoin is often discussed as a replacement for traditional money. It is not controlled by any person or institution, and the blockchain on which it is built is an accurate and transparent system of record. But the price is incredibly volatile; Bitcoin lost 65% of its value in 2022 and has since risen about 325% from that year’s low. As a result, it is too unpredictable to become a medium of exchange for most consumers and businesses.

Many investors instead view Bitcoin as a store of value – like a digital version of gold – and it has outperformed every other major asset class over the past five years:

Bitcoin price chartBitcoin price chart

Bitcoin price chart

The investment thesis behind Bitcoin is relatively simple. The supply is limited to 21 million coins, which are paid to miners who use powerful computers to add new blocks to the blockchain. Every 210,000 new blocks trigger a halving, halving the reward for mining Bitcoin. Estimates suggest that the last Bitcoin will be mined sometime around the year 2140.

Because supply is limited, only demand determines the price. There are almost 50 million wallets that hold whole bitcoins or partial coins. That figure is almost at a record high. Additionally, 2023 was one of the most active years for wallet making, which is a good indicator of demand. Theoretically, Bitcoin’s limited supply will cause prices to rise as long as people continue to open new wallets to purchase the cryptocurrency.

However, that alone may not be enough for Bitcoin to achieve the astronomical gains touted by Ark and Wood.

Ark’s catalysts for a higher Bitcoin price

Ark highlights eight potential sources of Bitcoin demand that could skyrocket its price by 2030:

  1. Company treasury: Ark believes that companies will ultimately hold between 0% (bear case) and 5% (bull case) of their cash reserves in Bitcoin.

  2. Transfer asset: Bitcoin could represent between 5% and 25% of all non-commercial money transfers.

  3. Nation State Treasury: Finance ministries around the world could hold between 0% and 5% of their assets in Bitcoin.

  4. Emerging market currencies: Bitcoin could be the primary currency in some developing countries. El Salvador has already adopted it as legal tender.

  5. Economic settlement network: Bitcoin could eliminate some fees imposed by banks and financial institutions, capturing between 1% and 10% of US banks’ settlement volume.

  6. Attack-resistant property: Between 1% and 5% of the global wealth of high net worth individuals could be stored in Bitcoin to protect it from the government.

  7. Institutional investments: Banks and financial institutions could put between 1% and 6.5% of their assets into Bitcoin as they believe its value will continue to rise.

  8. Digital gold: Between 20% and 50% of the money investors normally allocate to gold could ultimately be put into Bitcoin, thanks to its strong performance and portability.

Here’s how high Ark thinks Bitcoin can rise by 2030 based on the demand generated by these eight catalysts:

  • Bear case: $258,500, which represents an increase of approximately 270% from the current price of approximately $69,000.

  • Main point: $682,800, which represents an increase of 880%.

  • Taurus case: $1,480,000, which represents an increase of 2,400%.

But Cathie Wood just doubled down

Wood spoke at the Bitcoin Investor Day conference in New York last week, where she said Bitcoin could even eclipse Ark’s 2030 price target of $1.48 million and rise to $3.8 million instead. The 5,300% increase could be driven by further adoption of Bitcoin exchange-traded funds (ETFs), which received approval from the US Securities and Exchange Commission (SEC) in January.

To date, the ten approved ETF operators – including Ark – manage more than $58 billion in assets in their Bitcoin funds, and that figure is growing. Wood says that if institutional investors allocated just over 5% of their portfolios to Bitcoin, that alone would be enough to justify a price of $3.8 million.

Wood thinks Bitcoin still has miles to go in terms of upside potential. She believes the cryptocurrency is the key to an Internet-based way of transacting that eliminates toll takers like banks and financial institutions, which collect a fee almost every time money moves.

Is Wood’s prediction realistic?

Past performance does not predict future results, so there is no guarantee that Bitcoin will continue to outperform other asset classes, let alone rise more than 50 times.

The cryptocurrency would have a market cap of $74.7 trillion if it reached a price of $3.8 million, making it nearly three times more valuable than the US economy in terms of gross domestic product, and 23 times more valuable than the largest company in the world (Microsoft).

That seems unlikely to me. It makes sense to treat Bitcoin as a store of value, and perhaps one day it could have a similar market cap to gold, which currently stands at $14.6 trillion. That would translate into a tenfold return in Bitcoin from now on, bringing it to $743,500, which is slightly above Ark’s base estimate.

Should you invest $1,000 in Bitcoin now?

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Anthony Di Pizio has no positions in the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.

1 Unstoppable Cryptocurrency With 5,300% Gains by 2030, According to Cathie Wood Originally Published by The Motley Fool

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