Ark Invest predicts Bitcoin at $400,000 if S&P500 companies allocate 10% of their cash

  • According to Ark Invest’s Cathie Wood, Bitcoin is a much bigger idea than Apple or Amazon, and with a market cap of 600 billion continues to be undervalued.
  • Bitcoin is ready for institutional adoption and could rise to $400,000 if S&P500 companies invest 10% of their cash, according to Ark Invest’s latest report.

In an interview with Yahoo! Finance, Ark Invest co-founder Cathie Wood was overly bullish on Bitcoin. She called Bitcoin a “much bigger idea” than Apple and Amazon, the two most valuable companies in the United States.

What Wood finds remarkable about the current bull run is that a relatively low level of speculation is influencing the market, except for the last few days when Elon Musk and WallStreetBets have exerted a greater or lesser influence. Wood sees institutional investors, who have made their investments public over the past year, as the most important factor in the growth of the Bitcoin market.

This is “fascinating” but not surprising, Wood argues. For institutions, Bitcoin offers a way to diversify the portfolio with less risk because of its low correlation with other asset classes.

[…] because if you look at the correlation of Bitcoin’s performance relatively to any other asset class, it has the lowest correlation – meaning if you buy some Bitcoin, you will further diversify your portfolio and increase your returns with lower risk.

Bitcoin correlation

Source: https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARK%E2%80%93Invest_BigIdeas_2021.pdf?hsCtaTracking=4e1a031b-7ed7-4fb2-929c-072267eda5fc%7Cee55057a-bc7b-441e-8b96-452ec1efe34c

Bitcoin is ready for institutional adoption

According to Wood, MicroStrategy’s bet on Bitcoin is a “crazy” one, as regulators will wonder if it is the “MicroStrategy Technology Company or an ETF-like offering” given the stock offering. That being said, Wood does expect more companies to follow the lead of Square and others to invest some of their cash reserves in Bitcoin.

We do believe that Bitcoin is getting ready for institutional [adoption]. When we actually think about this […] is Bitcoin ready for institutions? Bitcoin is only a $600 billion market cap. Not even half the size of Apple or Amazon […] And yet it is a very big idea. I think a much bigger idea than Apple or Amazon.

The biggest surprise for Wood is MassMutual’s entry into the Bitcoin market. The Massachusetts-based company bought 100 million worth of Bitcoin in mid-December and is the most important “seal of approval” for Bitcoin so far, she said:

MassMutual is very conservative and very highly regulated, and it had to jump through many more regulatory hurdles than I thought would have been possible by now. So I think it’s a seal of approval.

Ark Invest’s prediction for the Bitcoin price

In its “Big Ideas 2021” report released last week, Ark Invest estimates that the Bitcoin price could rise above $400,000 if it replaces 10% of the cash reserves of all S&P500 companies.

Bitcoin ark invest

Source: https://research.ark-invest.com/hubfs/1_Download_Files_ARK-Invest/White_Papers/ARK%E2%80%93Invest_BigIdeas_2021.pdf?hsCtaTracking=4e1a031b-7ed7-4fb2-929c-072267eda5fc%7Cee55057a-bc7b-441e-8b96-452ec1efe34c

About Author

Jake Simmons has been a crypto enthusiast since 2016, and since hearing about Bitcoin and blockchain technology, he's been involved with the subject every day. Beyond cryptocurrencies, Jake studied computer science and worked for 2 years for a startup in the blockchain sector. At CNF he is responsible for technical issues. His goal is to make the world aware of cryptocurrencies in a simple and understandable way.

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