Cathy Wood, maverick investor and head of Ark Invest, isn’t known for being shy. Her career has been marked by bold moves and bold statements.
Perhaps nowhere is that more true than with her predictions for Bitcoin (crypto: BTC) and its future. The cryptocurrency that started it all has exploded of late, up more than 40% in the past month and reaching six figures for the first time. As impressive as that is, Wood believes it has a long way to go. In recent years, Wood has been on record as saying that the price of Bitcoin could reach $3.8 million by 2030 -- a 3,890% increase from today’s value.
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Institutions are key
Wood’s primary argument revolves around increased buying from institutional investors. She believes that the recent surge in professional money managers adding Bitcoin to their holdings will fuel the surge and the resulting capital inflows will have a huge impact on its price.
The fact that a large group of managers across Wall Street -- not just the most forward-thinking or risk-tolerant -- see Bitcoin as a legitimate investment is undoubtedly one of the most important developments in crypto since its inception.
From the beginning, the industry had an image problem -- it still does, but that's changing. Many people still see it as too risky, but that's a far cry from the early days, when most saw it as a passing fad or a complete scam. The tacit blessing of Wall Street firms is helping to change that perception.
Currently, about 60% of professionally managed funds hold at least 1% of their portfolios in digital assets, and most intend to increase their positions in the future. It wasn’t that long ago – just a few years ago – that any professional manager wouldn’t touch Bitcoin with a 10-foot pole.
The growing acceptance of Bitcoin as legitimate on Wall Street, while cautious at the moment, is a game-changer in the long run.
The approval of spot Bitcoin ETFs was a key catalyst
The introduction of spot Bitcoin exchange-traded funds (ETFs) earlier this year was a key enabler for this shift. After the Securities and Exchange Commission (SEC) gave them the green light, issuers like Ark began offering investors exposure to Bitcoin without requiring them to own their own assets. ETFs can be traded like any other security through a traditional brokerage. They also provide increased liquidity to the market, which is important for institutional investors.
The growing acceptance of Bitcoin as legitimate on Wall Street, while cautious at the moment, is a game-changer in the long run.
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