Key highlights:
- According to Ark Invest, Bitcoin can climb by $40,000 if S&P 500 companies allocate 1% of their funds to BTC
- If institutional investors put 6.5% of their cash in BTC, the price can hit $500,000
- Researchers claim that BTC is a good asset for diversification in portfolios
In a recently published report, Ark Invest discussed Bitcoin and the potential prices it could reach in the future if more institutional investors enter the market. According to Ark Invest, if S&P companies allocate 1% of their funds to BTC, its price will ascend by around $40000. The report goes further and talks about 10% of the institutional investors’ cash, and it claims that it could add $400,000 to the Bitcoin price.
The best case scenario
According to the report, if the institutional investors allocate 6.5% of their funds to BTC, they will experience the best output. Meanwhile, Bitcoin can meet the $500,000 price target from the massive impact of that capital. The report says institutional allocations to Bitcoin should likely range between of 2.55% and 6.55% – it will depend whether the specific investor is trying to minimize volatility or is instead seeking maximum returns.
Bitcoin was the best investment opportunity in the last decade. BTC was unrelated to traditional assets and regulations in the previous years, and today, it is a smart choice for the institutions to diversify their portfolios. The market cap for this asset is experiencing rapid growth, and it is a positive sign of a bright future for the world’s largest cryptocurrency.
ARK says that within six years, BTC has the potential to overtake both US stock market and the international FX spot market in terms of daily market volume. Right now, institutions have many different instruments to enter the BTC market. For instance, the Chicago Mercantile Exchange’s Bitcoin futures contracts are one of the most used instruments by institutions who want to get exposure to Bitcoin. ARK believes Bitcoin has a very favorable risk/reward ration and in their estimation, Bitcoin’s market cap can go to $1-5 trillion in 5 to 10 years. In the end, the report calls Bitcoin an opportunity that the institutions shouldn’t ignore.
There is considerable enthusiasm for bitcoin among institutional investors, and even if they only invest a small percentage of their cash in BTC, the results could be tremendous.
