Bitcoin The largest cryptocurrency will surge over the next four years, pushing its market capitalization to $16 trillion by 2030, Ark Invest said in its annual research report, Big Ideas.
The investment firm led by Cathie Wood said the more than 10-fold growth, which currently has a market capitalization of about $1.5 trillion, will be driven by accelerated institutional adoption and the evolution of cryptocurrencies into an asset class in global investment portfolios. The compound annual growth rate is approximately 63%.
The growing popularity of Bitcoin will help drive the broader digital asset market to approximately $28 trillion by the end of the decade, the report said. It is currently around $2.7 trillion, according to CoinDesk. This also means prices could skyrocket: even if all 21 million BTC were in circulation by then (which they are not), one Bitcoin would be worth over $730,000.
Wood has long been bullish on Bitcoin. In January, Ark Invest predicted a price range of $300,000 to $1.5 million by 2030. In February, Wood reiterated its appeal as a hedge against inflation and deflation, driven by accelerating technology.
“Bitcoin is maturing as a leader in a new institutional asset class,” driven by adoption by exchange-traded funds (EFTs), corporate vaults and sovereign entities, the report said.
Institutional ownership of Bitcoin, primarily, has increased rapidly. The report said that as of the end of last year, U.S. ETFs and listed companies held about 12% of the total Bitcoin supply, an increase from about 9% in the same period a year earlier.
The move reflects a shift in sentiment toward Bitcoin. It was once viewed primarily as a speculative asset, but is now increasingly viewed as “digital gold,” a macro hedging tool and a reserve asset alongside traditional stores of value.
The report added that even if the penetration of institutional holdings is only 2.5% of the $200 trillion global investment portfolio (excluding gold), it may contribute approximately $5 trillion to Bitcoin’s total valuation.
The report also predicts that Bitcoin will account for 40% of gold’s total market value, which is currently expected to be slightly more than $24 trillion, meaning that the “digital gold” argument alone will bring nearly $10 trillion in additional upside.
Other contributions to Bitcoin’s growth will come from emerging demand for neutral reserve assets, which could add approximately $339 billion in value even if they penetrate just 0.5% of the $68 trillion monetary base, in addition to allocations from nation-state and corporate treasuries that could add hundreds of billions more.