bitcoin The largest cryptocurrency, will rise over the next four years, boosting its market capitalization to $16 trillion by 2030, Ark Invest said in its annual research report, Big Ideas.
The more than 10x growth (market capitalization is currently about $1.5 trillion) will be driven by accelerated institutional adoption and the evolution of cryptocurrencies into an asset class that features in investment portfolios around the world, the Cathie Wood-led investment company said. That’s a compound annual rate of about 63%.
According to the report, Bitcoin’s growing popularity will help drive the overall digital asset market to around $28 trillion by the end of the decade. It currently amounts to about $2.7 trillion, according to data from CoinDesk. It also means the price could skyrocket: even if all 21 million BTC were in circulation by then, which they wouldn’t, one bitcoin would be valued at more than $730,000.
Wood has long been bullish on bitcoin. In January, Ark Invest forecast a price range of between $300,000 and $1.5 million by 2030. In February, Wood reiterated its appeal as a hedge against inflation and deflation, driven by technological acceleration.
“Bitcoin is maturing as the leader of a new institutional asset class,” the report says, driven by adoption in exchange-traded funds (EFTs), corporate treasuries and sovereign entities.
Institutional ownership of, primarily, bitcoin is already increasing rapidly. U.S. ETFs and public companies held about 12% of the total bitcoin supply at the end of last year, up from about 9% the year before, according to the report.
The move reflects a change in the way bitcoin is perceived. Once seen primarily as a speculative asset, it is increasingly seen as “digital gold,” a macro hedge and reserve asset alongside traditional stores of value.
He adds that even modest penetration into institutional holdings, as low as 2.5% of an estimated $200 trillion global portfolio, excluding gold, could contribute around $5 trillion to bitcoin’s total valuation.
The report also predicts that bitcoin will capture approximately 40% of gold’s total market value, which was estimated at just over $24 trillion currently, implying nearly $10 trillion in additional upside from the “digital gold” narrative alone.
Other contributions to bitcoin’s growth would come from emerging demand for a neutral reserve asset, where even just a 0.5% penetration of a lower $68 trillion monetary base could add around $339 billion in value, along with allocations from nation-states and corporate treasuries that could each contribute hundreds of billions of dollars more.
