Bitcoin could crack US$100K by the end of 2021: Mike Novogratz
Cathie Wood says bitcoin is in “early days” given its new interest from institutions and its diverse use cases.
Speaking as part of a panel for the Bloomberg Crypto Summit, the founder of Ark Investment Management said the largest digital currency has trillions in market cap potential.
“When you think the market cap of bitcoin is roughly US$950 billion, think about that in the context of an Apple,” she said. “It’s less than half of Apple’s valuation and here were talking about the reserve currency of the crypto asset world.”
Increased adoption by institutions this year has been a positive surprise, Wood said.
“We expected institutional investors to start moving in,” she said. “What we did not expect from institutions was the diversification on their balance sheet and a diversification of their cash assets into bitcoin.”
Michael Sonnenshein, chief executive officer of Grayscale Investments, also spoke on the panel which was moderated by Bloomberg Intelligence’s Mike McGlone.
Earlier this week, Wood told Bloomberg Radio that she’s “very positive” on bitcoin and considers its recent correction to be healthy.
Ark Investment owned 7.3 million shares of the Grayscale Bitcoin Trust at the end of 2020, according to a filing. The firm indirectly holds the token through its exchange-traded funds’ investments in Tesla Inc. and Square Inc. The US$25 billion ARK Innovation ETF (ARKK) contains both Tesla and Square, at 10.4 per cent and 4.8 per cent of the fund, respectively. Square is the top holding of the Ark Fintech Innovation ETF (ARKF), at 9 per cent, and is also in the Ark Next Generation Internet ETF (ARKW). And Tesla is the top holding of the Ark Autonomous Technology & Robotics ETF (ARKQ), at 10.6 per cent.
Square said Tuesday that it bought another US$170 million in bitcoin, adding to its previous $50 million and brining holdings to about 5% of the company’s cash and equivalents. Tesla also disclosed a US$1.5 billion bitcoin addition to its balance sheet earlier this month.
Even before the largest cryptocurrency’s 450 per cent rally in the past year, Wood was a believer. She told Bloomberg News in 2015 -- back when bitcoin had just reached US$500 -- that she’d doubled her money in the coin amid emerging market volatility.
Bitcoin traded around US$51,500 as of 11 a.m. in New York after plummeting about 13 per cent earlier this week in the worst pullback in a year. ARKK extended its decline into a fourth day amid a broader tech sector drop.