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“The US economy is expected to collapse”
Kevin O’Leary Responds to Cathie Wood’s Bitcoin Prediction: ‘The US Economy Is Expected to Collapse’
Cathie Wood, CEO of asset management firm Ark Invest, is known for her outrageous projections about the future of cryptocurrencies. While these predictions could make any cryptocurrency investor much richer, they are based on very strong assumptions that have a very low probability of coming true.
Wood has made several predictions about Bitcoin, each time raising the price target. Earlier this year, Wood noted that “Ark”base case“For Bitcoin, the price would be $600,000. However, this prediction has been increased to $3.8 million by 2030:
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“Last year, we laid out our bull case for Bitcoin. It was $1.5 million. With this institutional green light that the SEC has given, despite their reluctance, the analysis that we’ve done is that if institutional investors were to allocate a little bit 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 that I just gave you,” Wood said.
According to Kevin O’Leary, entrepreneur and host of the show “Shark Tank,” “that kind of appreciation would mean, in my opinion, that the American economy would collapse. So it’s not a good speculation.”
O’Leary goes on to say that many view Bitcoin as a hedge against economic downturns and that it holds a “weighting in this space for that reason.” This is largely because Bitcoin has a predictable supply that allows the price to be controlled almost exclusively by demand, whereas central bank currencies can be manipulated by human intervention.
However, O’Leary does not believe that the global economy or the US economy will collapse anytime soon, which, by his logic, would make it nearly impossible for Bitcoin to reach Wood’s price target.
It should be noted, however, that Wood’s prediction relies on institutional investment. Wood and Ark believe that high levels of institutional involvement in Bitcoin could drive the price higher. While this could happen, the likelihood of institutions investing “a little more than 5% of their portfolio in Bitcoin” is close to zero.
While a global economic collapse or a massive institutional investment surge could potentially propel Bitcoin to new highs, these events are highly unlikely to occur. Additionally, it’s important to note that Wood has a vested interest in hyping Bitcoin and making the future look very bright. In January 2024, Ark was one of several companies that launched a spot Bitcoin ETF. If Wood can get investors excited about Bitcoin with her predictions, she could inspire them to start trading Bitcoin ETFs, and Ark’s ETF in particular.
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