If You Can Handle the Ups and Downs of Bitcoin Without Losing Hope, You’ll Have the Chance To Seize a Once-in-a-Lifetime Investment Opportunity.
Cathie Wood: Bitcoin will be a flight to safety Vehicle for people, the opposite of how traditional investors view the world.
Photo — Wiki Media Commons Image
Don’t you admire the people hot on the pulse of the ‘next thing’ and willing to take calculated risks to capitalise on them?
Heck, anything else would just be boring.
Humans like shiny new things.
When an asset class is new, we also go through periods of self-doubt.
Even in scepticism and doubt, Cathie Wood has unwavering confidence in her investment decisions.
According to her, institutions wildly misunderstand Bitcoin, which she says is destined to become a household name, and she’s adamant that it’s a worthwhile investment opportunity.
Wood is a risk-taker who seemingly doesn’t give a shit that males dominate her line of work.
When she started her investment firm, ARK Invest, many older and more traditional investors thought her focus on disruptive technologies and innovation was too risky and unproven. Some even dismissed her ideas as just guesses or speculation.
Wood now says that she believes Bitcoin has the potential to become incredibly valuable, in the same way, Amazon’s value catapulted.
She acknowledges Bitcoin’s price will be volatile in the short term but is confident that the demand for the decentralised asset will eventually bounce back and do well in the long run.
Surprisingly, people view Bitcoin as a flight to safety amid the recent banking crisis, much like how people invest in Gold during times of uncertainty.
Cathie Wood — Source
“We have found it interesting that Bitcoin and crypto generally rallied in the face of a crisis, the Regional Bank crisis and that was proof positive to us that crypto, especially Bitcoin and to some extent Ether, have become a flight to safety vehicles, much like gold.”
You Can Make Reasonable Assumptions About Where Bitcoin Will Go.
According to Wood, Bitcoin has the potential to become a significant player in the financial industry and could even surpass the market capitalisation of Gold.
Bitcoin is still a relatively new and volatile asset, and its adoption and regulation are uncertain.
Since 2009, the price of Bitcoin has experienced significant growth, reaching an all-time high of over $64,000 in 2021 before experiencing colossal volatility.
Bitcoin’s underlying technology, Blockchain, is critical to her prediction. Blockchain is a decentralised and secure way of recording and verifying transactions, and it can potentially revolutionise industries beyond finance.
It’s hard to predict the future of Bitcoin and other cryptocurrencies with certainty. But Wood is optimistic and says her strong belief in the underlying technology’s potential and the growing adoption of cryptocurrencies make it a good bet.
Wood believes Bitcoin will reach a price of $1 million by 2030 and says a crisis can help “battle-test” an asset, and Bitcoin has emerged “smelling like a rose” after the recent banking failures.
Once institutions fully understand and adopt Bitcoin, you’ll see a domino effect.
Only time will tell if her prediction comes to fruition, but it is clear Bitcoin and other cryptocurrencies are here to stay and will continue to be a disruptive force in the financial industry.
Cathie Wood — Source
“It would be best if you went through a crisis to see the survivors and battle-test the infrastructure and the thesis.
And Bitcoin is coming out of this smelling like a rose.
The one thing that will be delayed is institutions stepping back and saying do we understand this?
Once they do the homework and see what we’ve done here, I think they may be more comfortable — coming into Bitcoin and perhaps Ethereum as a first step.”
These Factors Could Cause Hyperbolic Bitcoin Growth.
In a world of unknowns, people hang around waiting for price predictions like crack addicts on a street corner when the most obvious move is to look at the data around adoption and make your own decision.
Blockchain is on an open ledger, so you can quickly see how much BTC is being bought and sold and how many new wallets hold BTC.
The most conclusive research data you’ll come across in the industry is from Cathie Woods’s investment company, Ark Invest.
They have broken down the data, making the price prediction forecasts significant.
Ark Invest suggests $1 million per Bitcoin by 2030 is downplaying it.
There’s a caveat.
You’ll need to stomach the ups and downs of the market and hold your investments for the long term to see substantial gains, as with any investment.
According to the research, when people wait to trade Bitcoin for around six months, the chance of it ever being sold drops significantly.
In other words, more time holding Bitcoin equates to a lesser likelihood of people ever letting go of it.
As of the end of 2022, data shows that people who have owned Bitcoin for more than six months make up 71% of all the Bitcoin available to buy and sell.
Despite five significant drops in the value of more than 75% since it started in 2009, Bitcoin has still given positive average returns over three, four, and five years against other traditional asset classes.
You can’t predict the future, but historical data and current trends can guide you, so here are some possible outcomes based on the same research from Ark Invest by making, as they say, “reasonable assumptions” and factoring in several categories and trends.
Here is a breakdown of metrics from Ark.
Institutions and retail investors are committing to Bitcoin during a bear market.
Bitcoin’s hash rate hit an all-time high In 2022
Forecasts on digital wallet usage trending upward
Data shows Bitcoin holders are more long-term focused than ever in history.
Bitcoin’s capitulation has hit levels associated with price troughs in the past — so subsequent price increases may repeat, but previous performance doesn’t guarantee future results.
Bitcoin’s fundamentals are stronger today than in past drawdowns.
As a result of their forward-looking indicators and the current compound annual growth rate trend, ARK says the price of one Bitcoin could exceed $1 million by 2030, and it’s not outlandish.
While the figures are high, given that these things take longer than people anticipate, it’s a more plausible scenario than denying it as a good investment.
Here are Ark Invests Forecasts.
Bear Case — $258,500 by 2030
Base Case — $682,800 by 2030
Bull Case — $1.48 million by 2030
Final Thoughts
You should take the emotion out of all this and be guided by the only data that matters.
Adoption.
Cathie Wood gets so much air time mainly because her forecasts feed our curiosity of constantly seeking a glimpse into the future.
She sticks her neck out and puts her views on the line.
Wood’s vision for Bitcoin could come true, as she has proven her ability to spot trends and capitalise on emerging technologies.
On the other hand, her prediction could fall short, given the unpredictable nature of cryptocurrency markets and ever-changing regulatory landscapes.
Ask yourself, is it more or less likely that the price will increase over a long-term time horizon?
Analyse the data and trends.
Don’t be swayed by your emotions.