Cathie Wood’s brainchild ARK Invest has been having a difficult few months. The flagship fund ARKK is down nearly 60% from it’s record high last year, however Wood and her team of analysts aren’t stopping their full-focus on innovative and forward-thinking investments – even when fundamental investments are running the show.
This week was host to ARK’s ‘Big Ideas Summit,’ and ARK crypto analyst Yassine Elmandjra supplemented that material with a boisterous bitcoin tweet that will be music to BTC maxi’s ears.
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Elmandjra’s tweet, which can be found below, showcases how a single BTC unit could hit $1M in value, with a couple prime assumptions:
One bitcoin’s price could reach $1,000,000 by 2030.
It is still too early. pic.twitter.com/rvja2h2vi5
— Yassine Elmandjra (@yassineARK) January 25, 2022
Let’s take a look at that graphic specifically to drill down on the assumptions being made here, and why they’re important:
The core key assumption here, of course, is the staggering growth in bitcoin’s market cap over the next 9 years. According to this model, the ARK group projects growth between a $1.1T current market cap and a $28.5T market capital. What is the scale of this? According to an October 2021 report from securities trade group SIFMA, the U.S. equity markets carry a market cap around $50T – making a $28.5T market cap for a global bitcoin market seem not all that unreasonable. Elmandrja’s graphic also states anticipated breakdown of the use case allocated within the market cap, and it’s representative contribution towards the price per BTC.
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Elmandrja, along with the ARK Invest Team continue to highlight that even assuming a $28.5T global market cap is possible, this could prove more conservative than optimistic. Elmandrja added, “If Bitcoin does hit $1 million, it will still only represent a fraction of global asset values” and also highlighted the notorious ‘diamond hands’ that bitcoin holders often exhibit, stating that “Market participants are becoming more mature and staying long-term focused. Aggregate cost basis (realized cap) is at all time highs and more than 13.5 million btc are held by long-term holders.”
This, of course, isn’t likely anything groundbreaking to those who have studied the bottom-line extensively. Comparatively to the other global markets, $28.5T would trade at multiple times less than similar markets such as global real estate, global bond markets or global equities markets.
Elmandrja’s full thread is a worthy read for these reasons and several others that take deep dive into ARK’s optimism around bitcoin (and crypto at large) as an investment vehicle. The full report, Big Ideas 2022 can be accessed here.
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Featured Image from Ark-Invest.com. Charts from TradingView.com. This content was not written by or associated with the mentioned parties. This article is not meant to provide financial advice.