Key Takeaways:
- Cathie Wood believes Bitcoin could reach $1 million a coin by 2030.
- ARK Invest presented three cases, with the lowest estimate at $260,000.
- If Bitcoin’s volatility decreases over time, the $1 million target appears absurd.
YEREVAN (CoinChapter.com) — Cathie Wood, chief of investment firm ARK Invest and an outspoken crypto proponent, reiterated her previous prediction that Bitcoin (BTC) could reach $1 million per coin by 2030.
Wood Sees BTC at $260K in Bear Case
ARK’s research team based their assumption on the resourcefulness of emerging asset classes and said that the target could be reached if a growing number of institutions and companies allocate to BTC.
If we’re right and the purchasing power of Bitcoin becomes so obvious in the years ahead, meaning it goes up instead of dollars, then more and more corporate treasuries are going to be putting Bitcoin on their balance sheets.
said Wood.
As seen in the chart above, ARK Invest has three possible scenarios, where the lowest BTC price by 2030 stood at approximately $260,000. The base case prediction saw Bitcoin at $680,000 a pop, while the bull case pinned the BTC/USD exchange rate at a whopping $1.48 million.
Bitcoin’s $1M Target is Not Realistic
Bitcoin is an asset with a limited supply of 21 million coins, according to its source code. As of Oct 19, the circulating supply stood at 19.5 million, and the price per coin was $28,400. Thus, Bitcoin’s current market cap is $555.5 billion (supply x price per coin).
If Bitcoin reached $1 million per coin, even at the current circulating supply, the market cap would stand at $19.5 trillion.
For comparison, the global M1 money supply amounts to just under $49 trillion. In detail, M1 includes the sum of all currency in circulation plus the value of most liquid deposits at commercial banks, except those held by the government, foreign banks, or other depository institutions.
Bitcoin volatility Has Declined Over Time
Bitcoin has been notoriously volatile, thus hurting its store-of-value prospects. But, investment firm Fidelity believes Bitcoin’s limited supply will eventually result in lower volatility.
We believe [Bitcoin] volatility may decline […]if base demand rises, activity on institutional platforms expands, and sophisticated investment trading and investment products emerge. In addition, while regulatory changes may lead to more intervention, they could also contribute to decreased volatility.
read Fidelity’s research.
If the assumption is correct, more institutional inflow to Bitcoin would translate into a slower price increase over time. As seen in the chart below, BTC volatility has been decreasing since 2021 and stood at just over 1.2% on Oct 19, down from 12.8% in 2010.
While Bitcoin investors would love to see the asset at $1 million a coin, the monumental 3,500% price increase over the upcoming seven years does not appear likely.
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