rise of Bitcoin (BTC -1.20%) Over the past decade, prominent financial figures have revealed their stance on the booming assets. Kathy Wood, CEO of Ark Invest, is one of the most vocal supporters. Her investment company came into the spotlight in 2020 as a result of the success Ark Innovation ETF (ARKK -4.23%).
In one of its most bullish estimates, the company called for bitcoin to reach $500,000 by 2026 just last September. Even better, it recently doubled in January when it predicted that the value of one bitcoin would be $1,000,000 or more by 2030.
what are you thinking about?
For Bitcoin to reach $1,000,000, it would have to rise nearly 2,000% in just under eight years. It doesn’t sound too crazy when you consider that it has risen about 3,500% since 2017. If Bitcoin is going to reach these levels, a lot has to change and current trends have to amplify.
Kathy Wood and her company came up with these estimates after authoring several research papers that took one of the most comprehensive and in-depth assessments of the current and future state of Bitcoin. This research highlights many of the macro and microeconomic factors that led Cathy and her team to the million dollar hypothesis.
In a recent interview in Miami at the Bitcoin Conference, Wood was first questioned about her reasons. A few of its main points stood out.
Most important was the new political support for Bitcoin. She specifically mentioned Janet Yellen (Treasury Secretary) and Gary Gensler (Chairman of the Securities and Exchange Commission). Wood credited Gensler as the driving force behind the 180-degree turn of Yellen’s earlier anti-crypto sentiment. She believes Gensler would have more success in persuading other politicians because of his background as a professor at MIT.
I predicted Bitcoin would become a hot topic for voters in the upcoming elections. Wood claimed that it would not surprise her if political candidates run full campaigns in support of Bitcoin and cryptocurrency in general. In her typical candid manner, Wood laughs that when considering how wide the political divide has been lately, of all things, Bitcoin now has bipartisan support.
Another topic was increasing access to Bitcoin in the US. Wood directly pointed to innovation and the integral role of the second layer scaling solution for Bitcoin, the Lightning Network, to attract more users to Bitcoin locally. Payment apps like CashApp have used the Lightning Network to bring millions of users into the Bitcoin network.
Overall, Wood believes that there are “an incredible number of use cases and Bitcoin is the leader.” Opportunities abound to use Bitcoin as a hedge against government currency manipulation in developing markets. She believes that more high net worth individuals will use bitcoin as an insurance policy against government confiscation of their wealth. Finally, just like her company, she said institutional investors will continue to buy bitcoin slowly but surely.
Trust the professionals
Ark Invest did its due diligence, and like Babe Ruth, Cathy Wood shot her. Their business model is based on being right about these kinds of things.
Let’s say Cathy Wood is only half to the right, or one-fourth to the right. If Bitcoin rises to these prices, it will still be one of the greatest appreciated assets of our generation. Bitcoin’s short-term price fluctuations don’t matter in the grand scheme of things. 2030 will come before we know it and it fits perfectly with the old buy-and-hold investment strategy.