ARK Invest Says Bitcoin’s Going To $1 Million. Could It?

ARK Invest Says Bitcoin’s Going To $1 Million. Could It?
Jonathan Hobbs

about 1 year ago2 mins

Mentioned in story

ARK Invest released its Big Ideas for 2023 report last week. As you’d expect, it’s packed with bold predictions: one of them being that bitcoin could reach $1 million by the end of 2030. And while that sounds ambitious – bitcoin’s currently trading around $23,000 – it’s not unrealistic to think that it could eventually reach that level.

ARK has three scenarios for the OG crypto’s price come the end of this decade. There’s the bear case ($258,500), the base case ($682,800), and the bull case ($1.48 million). To get to each of those prices, bitcoin would need a yearly growth rate of around 40%, 60%, and 75%, respectively.

ARK uses a ton of assumptions in its modeling, so if you’re feeling dubious about those rates, that’s fair. Still, some of its thinking does make sense. For example, ARK sees institutional investors allocating somewhere between 1% and 6.5% of their portfolios to bitcoin by 2030 (green rectangle). Given all the building on that front (for example, BlackRock’s integration with Coinbase Prime, and BNY Mellon’s crypto asset custody service), I’d say that isn’t so far-fetched.

But the biggest contributor, says ARK, is the prospect of bitcoin taking a chunky bite out of the gold market – somewhere between 20% and 50% over the next eight years (purple rectangle). Bitcoin is digital gold, after all: you can mine it, it's scarce, and you can store it yourself without a third-party provider. Gold has a market size of about $12 trillion today, while bitcoin’s is just half a trillion. And if bitcoin reached half the size of gold, that’d put the OG crypto’s price at about $300,000 a coin. Throw in a few other assumptions and, sure, bitcoin could in theory reach $1 million someday – just don’t bet the farm on it happening by 2030.

If you’re a fan of big investment ideas, check out the ARK Innovation ETF (ticker: ARKK; expense ratio: 0.75%) – it’s down 75% from its 2021 highs, so it could be a contrarian play.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG