Bitcoin’s Recent Fluctuations
Bitcoin has been swinging between steep increases and short-lived retreats over the past few weeks. After it fell to $76,273, it went up to $104,974. Although it came close to that high bar, it couldn’t sustain itself and traded at $104,920 following a 0.50% decline during the past 24 hours. However, long-term forecasts by Ark Invest indicate massive moves might be looming ahead.
Cathie Wood’s Predictions
Cathie Wood, CEO of Ark Invest, made her prediction in an interview with CNBC and presented a long-term view. The firm’s base scenario predicts Bitcoin at $700,000 to $750,000 by the end of the decade. Under an aggressive scenario, it goes all the way to $1.5 million. These forecasts were made by David Puell, who is the market analyst at Ark Invest.
Source: Ark Invest
Wood pointed out how investor sentiment is slowly shifting. She opines that more and more people see Bitcoin as a safe repository of funds. That potentially makes it a challenger to gold in that role. Institutional involvement is in its nascent stages now, she said but is poised to be a potent growth driver.
Ark Invest’s Strategy and Institutional Trends
Ark Invest has backed its forecast with active investing. With its ARK 21Shares Bitcoin ETF, it has invested an additional $58 million in Bitcoin. Wood emphasized that institutional investing is still just starting out as she asserted that “Institutions are just testing the waters.” Should they increase their participation, it might drive Bitcoin significantly higher in the years to come.
From a security perspective, Wood also referred to Bitcoin’s capacity to protect its holders against unjust seizure of wealth. This, she said, could be achieved either through inflation or confiscation at a state level. Because Bitcoin’s supply is constant and not regulated by central banks, it possesses stability that traditional currencies do not have.
In the case of deflationary times, Wood further added that Bitcoin also has an advantage: transparency. In her view, this characteristic could prevent the kind of trust-based collapse that occurred in 2008 during the financial crisis.
“We won’t have an 08-09 with Bitcoin, everything is decentralized, no obfuscation,”
Bitcoin’s Growth Needed to Reach Targets
In spite of recent volatility in markets, Bitcoin would need to increase significantly in its long-term estimates according to Ark’s targets. Presently, the asset is 57% up year-to-date. After that, the base-case target figure of $710,000 would need a 575% jump.
In a bear case scenario, Bitcoin would have to increase by 1,330% to $1.5 million. Even more bearish is a more conservative estimate that anticipates growth of about 185% to $300,000. Wood’s optimism about these prices is based on both Bitcoin’s finite nature and its growth as an alternative store of wealth.
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