Cathie Wood's amazing prediction: Bitcoin will skyrocket 1900% to reach 2.4 million dollars!

In investment practice, investing in Crypto Assets usually faces significant Fluctuation, but if you can withstand the Fluctuation, you have a great chance of earning amazing profits. For example, since the beginning of 2020, the value of Bitcoin (BTC) has risen by about 1600%, but during this process, it also experienced five big dumps of 25% or more, especially in 2021 when the price of Bitcoin fell by more than half, and then gradually recovered to a historical high, only to lose more than three-quarters of its value again in 2022.

Currently, although the price of Bitcoin is approaching historical highs again, Cathie Wood's Ark Invest believes that Bitcoin will continue to rise over the next five and a half years. Based on their analysis of future Bitcoin prices, she and her team have set a target price of $2.4 million for Bitcoin, which means there is currently an upside potential of over 1900%. Although there will still be fluctuations during this process, these factors are sufficient to drive the price of Bitcoin up to the projected level.

1. The Two Major Forces Driving Demand: Institutional Recognition and Store of Value

Ark Invest's analysis listed several factors contributing to the rise in Bitcoin's value, with these two factors accounting for 80% of the target price:

Recognition by professional investment institutions: Ark Invest projects that by 2030, the potential market capitalization will rise to 200 trillion dollars. Assuming that by the end of 2024, the assets held by institutional investors (excluding gold) will increase by 3% from the current 169 trillion dollars. Analysts expect institutional investors to allocate 6.5% of their assets to Bitcoin, which will drive the rise in Bitcoin prices. The investments from these institutions clearly represent a significant asset allocation. Analysts state that currently, gold investments account for about 3.6% of the assets held by these institutions.

Therefore, investors must transfer all their gold into Bitcoin first and then transfer some to meet the situation predicted by the Ark Fund. The more widely recognized scenario (with a target price of 1.2 million dollars) is likely to allocate 2.5% of assets to Bitcoin, which may also be a more reasonable assumption in the long run. In the coming years, financial institutions may accelerate the adoption of Bitcoin for investment and trading. With Bitcoin exchange-traded funds (ETFs) now available for investors to trade, it will become much easier for institutions to buy and sell this asset.

In addition, the current Washington government is relaxing regulations on Crypto Assets and providing clearer information for investors. This will give large institutions more confidence in holding Crypto Assets. We are seeing more and more people adopting the Bitcoin reserve model launched by Strategy. Currently, Strategy has purchased $72 billion worth of Bitcoin and continues to add billions of dollars in Crypto Assets to its balance sheet each month. Analysts from Ark Fund believe that in the most optimistic scenario, companies will invest about $700 billion in Bitcoin.

As a means of storing value becoming increasingly widely applicable: Another factor driving Bitcoin prices higher in the coming years is that more and more people are viewing this asset as digital gold. At the same time, analysts see Bitcoin as a hedge against inflation. Considering the current stubbornness of inflation, and with new tariffs coming into effect, prices may rise, which could drive consumers to adopt Bitcoin investment to combat inflation. Analysts at Ark Fund believe that the current market value of gold is about 18 trillion USD, representing the potential market for Bitcoin as a substitute for gold. In a bullish scenario, it is believed that Bitcoin will capture 60% of the market share, which is nearly 11 trillion USD.

2. Supply and Demand: The Impact of Active Supply Volume

Supply and demand are the only two driving forces behind the price of Bitcoin. The aforementioned factors describe how the demand for Bitcoin may significantly rise in the coming years, but every time a new block is validated on the blockchain, the supply of Bitcoin will increase at a fixed rate.

However, analysts from the Ark Fund pointed out that not every Bitcoin can actually be used for buying and trading. For example, the wallet of Bitcoin's anonymous creator, Satoshi Nakamoto, has been idle since 2010, containing 1.1 million Bitcoins.

In addition, there are countless other wallets that have remained inactive for years, either because the owners of these wallets decided to hold them forever or because the owners lost or forgot their access keys and cannot access them. Analysts at Ark Fund estimate that only about 60% of the mined Bitcoin is in an active supply state.

When you apply this ratio to the continuously rising demand for Bitcoin in the coming years, it will lead to Bitcoin climbing to higher price targets. In a bull market scenario, the potential target price is 2.4 million dollars, but even in a bear market, due to the impact of limited active supply, it will at least push the price of Bitcoin up to 500,000 dollars.

3. Long-term Trends and Fluctuation

Currently, nearly 95% of Bitcoin (21 million coins) have been mined. The subsequent supply will not significantly increase unless a large dormant wallet unexpectedly decides to sell Bitcoin to the market, thereby pushing down the price.

But long-term trends indicate that the value of Bitcoin will continue to rise. The price of Bitcoin may not reach the $2.4 million peak predicted by Ark, but we have reason to expect that the price of Bitcoin will continue to climb. As long as you can endure the inevitable fluctuations, holding some Bitcoin in your portfolio will ultimately bring substantial returns.

Conclusion:

Cathy Wood's Ark Invest predicts that, driven by the three major factors of institutional recognition, widespread use as a store of value, and limited active supply, Bitcoin is expected to soar 1900% in the next five and a half years, reaching 2.4 million dollars. Despite the high volatility of the Bitcoin market, its long-term growth potential remains strong.