After a complicated start to the week, bitcoin’s value has returned above the $46,000 threshold. If the bulls are right, the bitcoin rally would possibly begin.
Cathie Wood, CEO of ARK Invest, predicts that bitcoin’s value may reach $500,000 over a five-year horizon, which is an accumulation of more than 10 times as far as the flagship cryptocurrency is traded lately.
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The head of ARK Invest is also positive about the opportunity of Ethereum, the largest cryptocurrency of the moment. Wood gave a vision at the SALT conference, which is lately taking a stand in New York.
For bitcoin’s value to live up to Wood’s predictions, some key industry trends will need to persist, he said: Companies will have to continue to transfer money to bitcoins on their balance sheets, and then institutional investors will need to allocate 5. % of assets under control to the leading cryptocurrency.
The wheels are in motion so that these situations are met. Michael Saylor, CEO of software company MicroStrategy, revealed this week that his company just invested more than $242 million of its Treasury assets to buy 5,050 bitcoins, bringing the total number of bitcoins on the balance sheet to around 114,042.
Other executives who have followed in Saylor’s footsteps include Square CEO Jack Dorsey and Tesla leader Elon Musk. By the way, Wood is also optimistic about Tesla and Square and his company is exposed to either stock.
Meanwhile, establishments are dipping their feet in the waters of cryptocurrency. Grayscale Bitcoin Trust has attracted other people like Morgan Stanley, which recently invested around $240 million in the fund. ARK Invest’s Wood is also confident that Central American countries are integrating bitcoin into its El Salvador leading the rate after giving bitcoin legal tender in the country.
Although Wood has a comfortable place for bitcoin, he also has a position for Ethereum in the wallet. It highlights Ethereum’s role in booming market position segments, adding non-fungible tokens (NFT) and decentralized finance (DeFi), both of which have helped drive Ethereum’s 350% value since the beginning of the year.
Wood suggests a 60/40 cryptocurrency asset allocation in bitcoin and Ethereum, respectively.