Cathie Wood has attracted a lot of attention from regular investors over the past few years. Part of the reason is that her investment company, Ark Invest, focuses on investing in companies at the forefront of innovation. She is also known for making bold predictions about the future.
This becomes apparent when you learn how extremely bullish Cathie Wood is on one particular asset. She and her team believe that the price of a top cryptocurrency will soar by nearly 1,700% by 2030. If this prediction comes true even a little bit, it could result in huge returns for investors.
Betting on a Big Return
Bitcoin (CRYPTO: BTC) certainly fits the criteria for Ark Invest’s investment philosophy on the cutting edge of technology. Looking ahead to the next decade, she is confident about this leading digital asset.
Ark Invest predicts that the price of Bitcoin will quickly rise to $1.5 million per unit by 2030. Compared to Bitcoin’s current price of about $84,000 on April 14, this would represent a massive increase of 1,686% and a compound annual growth rate of 78%. It’s an incredible prospect that is bound to outperform the overall stock market.
To reach such a high price target, Bitcoin’s popularity as a store of value will need to grow significantly. The cryptocurrency must gain greater acceptance among different stakeholders, including institutional investors, nation states, and corporations. In addition, Wood believes that Bitcoin will account for a growing share of the monetary base of emerging market economies. Moreover, he believes that Bitcoin’s market capitalization will grow as a percentage of gold’s market capitalization.
In its “Big Ideas for 2025” research report, Ark Invest highlighted some key advantages that Bitcoin exhibits that should boost investor confidence. The Bitcoin spot ETF launched in January 2024 is the most successful ETF in history. The April 2024 halving brought its inflation rate below that of gold. The cryptocurrency’s volatility continues to decline. And, based on Bitcoin’s hash rate, or the amount of computing power being used, the network’s security has reached unprecedented levels.
Although Bitcoin is currently trading 21% below its peak (as of April 14), there are definitely some factors in the world’s top cryptocurrency’s favor.
Lower your expectations
Cathie Wood and Ark Invest believe that Bitcoin’s price could rise by 78% annually over the next five years. It’s worth noting that Bitcoin has risen by an average of 66% annually over the past five years. Such an outcome is beyond doubt.
However, investors need to be careful to lower their expectations. I am bullish on Bitcoin in the long term, but I don’t think the returns in the future will be as high as in the past. I expect Bitcoin to rise much less than Wood predicts over the next decade.
Bitcoin is a more mature asset than in previous years, so big price increases may not happen again. In addition, it is usually wise to take any predictions with a grain of salt, no matter how exciting they sound. No one knows what the price of Bitcoin will be at some point in the future.
Ultimately, it all comes down to your personal risk tolerance. If you have a diversified portfolio and a long-term investment horizon, then including Bitcoin in it may be a smart move to increase your return potential. Owning an asset with a fixed supply, not controlled by anyone, and that continues to be favored by regulators, politicians, and prominent business people seems like a good choice.
