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1 Top Cryptocurrencies to Buy Before They Skyrocket 3,000% or More, Says Cathie Wood
According to Cathie Wood, CEO of Ark Invest, the price of Bitcoin (CRYPTO:BTC) could reach $1.5 million by 2030. Given Bitcoin’s current price of just under $50,000, this would represent a gain of nearly 3,000% over a remarkably short period of time .
At first glance, this $1.5 million price target may seem far-fetched to you. After all, over its 15-year history, Bitcoin only reached a high of $69,000 – and that was during the extremely frothy and speculative crypto bull market of 2020-2021. But, as Wood points out, two key catalysts could lead to Bitcoin’s value skyrocketing. Let’s take a closer look.
The new Bitcoin ETF
The obvious starting point is the new spot Bitcoin ETFs product. Ark Invest is one of the investment firms that has received approval for a spot Bitcoin ETF, so it’s no surprise that Wood is extremely optimistic about what this means for the long-term growth of Bitcoin . As she recently pointed out on CNBC, the SEC has just given Wall Street and Main Street the “green light” to invest in Bitcoin.
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Given that institutional investors manage billions of dollars in assets, it won’t take much to shake things up. For example, if institutional investors such as pension funds and endowments decide to allocate just 1% of their portfolios to Bitcoin, the consequences could be enormous. This could lead to an influx of billions of dollars into Bitcoin.
At the same time, wealth managers and financial planners could start advising their clients to consider allocating a portion of their portfolios to Bitcoin. This could also lead to an influx of new money into Bitcoin. Most likely, this would happen over a longer period of time and probably wouldn’t have as dramatic an effect as, say, BlackRock Inc. (NYSE: BLK) has $10 trillion in assets under management.
Bitcoin Use Cases
Additionally, Bitcoin has a growing range of use cases that make it valuable. Remember: Bitcoin is not only a financial asset, it is also a technological innovation based on blockchain technology. The most obvious use case right now is to act as a store of value. Many crypto investors refer to Bitcoin as “digital gold” precisely because it appears to be a long-term store of value, similar to physical gold.
But there are a handful of other use cases for Bitcoin that you may not have considered. In Ark Invest’s “Big Ideas 2023” report, the investment firm outlines eight different use cases for Bitcoin. For each of these use cases, the company applies several different projections and estimates of how big the market opportunity could be.
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For example, the base case scenario in the Ark Invest report predicts that institutional investors allocate 1% of their portfolios to Bitcoin. But the bullish scenario calls for institutional investors to allocate up to 6.5% of their portfolios to Bitcoin. The more institutional investors buy into (literally) the idea of Bitcoin, the more Bitcoin could rise in the medium and long term.
What could go wrong?
Based on the above, Bitcoin seems unstoppable. No wonder Cathie Wood recently doubled her $1.5 million price estimate for Bitcoin. But just keep in mind that Bitcoin is rarely predictable and often very volatile. So while the long-term macroeconomic trend might be an increase in the value of Bitcoin, there will certainly be plenty of turbulence along the way.
One of the main risks for Bitcoin has always been regulatory risk. Simply put, the SEC could decide to pull the plug on Bitcoin at any time. The large-scale approval of so many different spot Bitcoin ETF products at the same time seems to indicate that the SEC is finally on board with the idea of investors buying Bitcoin. But what happens if the new ETFs perform erratically, or if there are major problems in the way Bitcoin trades in the crypto market due to so many arriving so quickly? new money on the market?
That being said, I agree with Wood that a “baseline” model for Bitcoin valuation – in which all Bitcoin use case projections are summarized and then aggregated – makes a lot of sense. And I agree that the one-time approval of the Bitcoin ETF will almost certainly result in billions of new dollars flowing into Bitcoin. The big question, however, is how long it will take Bitcoin to reach that mythical $1 million price target.
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Dominique Basulto has positions in Bitcoin. The Motley Fool posts and recommends Bitcoin. The Motley Fool has a disclosure policy.
1 Top Cryptocurrencies to Buy Before They Skyrocket 3,000% or More, Says Cathie Wood was originally published by The Motley Fool