Must-Buy Cryptocurrency Predicted to Soar 1500%, Says Cathie Wood

Cathie Wood, a renowned growth investment strategist, has high expectations for Bitcoin (CRYPTO: BTC). The fund manager at Ark Invest began discussing cryptocurrencies before she became widely recognized, and she has recently reaffirmed her optimistic forecasts.

In an interview on Bloomberg TV last Thursday, Wood restated her prediction that Bitcoin could reach between $1.0 and $1.5 million by 2030. But there’s more to her viewpoint. What’s interesting about Cathie Wood’s discussion on Bitcoin is how she progressively elaborates on her investment rationale in finer detail as time goes on.

The recent interview provided fresh insights, so let’s delve into Cathie Wood’s updated economic theories that favor Bitcoin.

Cathie Wood’s Case for Bitcoin’s Value at $100,000

Initially, Wood mentioned that the likelihood of Bitcoin achieving her price targets by 2024 has increased. Institutional investors are beginning to seriously consider digital assets, spurred by recent innovations such as the launch of spot Bitcoin exchange-traded funds (ETFs) in January. These investments are expected to significantly influence Bitcoin’s price and stability in the coming years.

“[Large investors] now need to think about including it in their portfolios,” she said, pointing out that Bitcoin’s production is ultimately limited. This scarcity is significant because 94.3% of all Bitcoin that will ever be created has already been mined and is held in digital wallets worldwide. You cannot increase your share of Bitcoin significantly by producing more, as one might do with tangible assets like gold or oil. The stringent laws of supply and demand will inevitably push the price of this finite resource higher, prompting financial institutions to accumulate Bitcoin now before it becomes too costly.

In this light, a price of $100,000 per Bitcoin is not considered “expensive,” especially when the long-term projection is in the millions. Cathie Wood is focused on the bigger picture.

Bitcoin as a Robust Accounting Mechanism

Wood also emphasized that Bitcoin transcends being merely a speculative asset. Contrary to being another fleeting “tulip bulb craze,” Bitcoin fulfills a crucial role for those who see it as more than just an appreciating asset.

“It operates as a global monetary system that is rule-based,” she explained. “It is private, digital, decentralized, and supported by the world’s largest computing network. It’s the most secure network available.”

Bitcoin acts like a global and highly detailed ledger system that could hypothetically track all the gold in the world, attributing ownership to each fragment and securing this information with multiple layers of cryptography. Transactions and ownership records within Bitcoin’s framework cannot be altered or canceled without compromising the entire system. The asset tracked is not a tangible piece of precious metal but rather the computational work involved in producing a unique digital token.

While there’s an uncertain but finite amount of physical gold on Earth, the total number of Bitcoin tokens is capped at 21 million, with 19.6 million already in circulation. This structure is nearly immune to inflation, assuming it remains secure against emerging threats like quantum computing.

Comparing Bitcoin and Gold: Inflation Dynamics

Wood also pointed out the differences in how Bitcoin and gold are affected by inflation.

“When the price of gold rises, so does its production,” she noted. “This increase in supply doesn’t apply to Bitcoin. Its issuance is mathematically limited to increase by only 0.9% per year for the next four years, after which it will halve again.”

Indeed, when gold prices soar, mining intensifies as it becomes economically viable to extract more of the metal. However, Bitcoin miners face a decreasing output over time, meaning the cost of producing new Bitcoins increases while the rate of new coins entering the market slows.

Therefore, maximizing production efforts sooner rather than later makes sense, as the returns on mining equipment and electricity will diminish over time. This logic also supports purchasing Bitcoin early, as waiting for a lower entry price or an easier mining environment is generally unadvisable.

The Case for Including Bitcoin in Your Investment Portfolio

Thus, Cathie Wood reinforced her five-year Bitcoin price target of at least $1 million per coin, providing more details on her investment thesis.

While other Bitcoin investors might operate under different assumptions leading to various price targets, the general market sentiment remains consistent. Bitcoin appears poised to build on its recent milestone of $100,000. From major financial institutions to individual savers, most investors should seriously consider adding these innovative cryptographic tokens to their portfolios.

Anders Bylund holds positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

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