Cathie Wood, CEO and Chief Investment Officer of Ark Investments, made the prediction in an interview with Bloomberg, suggesting that the price of Bitcoin will reach $1 million by 2030. .
In a conversation on December 20th, Cathie Wood pointed to Bitcoin (BTC)'s fixed supply cap of 21 million yen as a key denominator for increasing the asset's value. She highlighted the scarcity of BTC as more than 19.5 million BTC has already been mined, which she said has increased institutional investors' thirst for the asset.
“Bitcoin is really the first of a new asset class, and it's going to be the biggest opportunity within it,” Wood said. As a result of this increased institutional adoption and the relationship between supply and demand, the chances of BTC reaching $1 million are now significantly higher, she argues. Referring to Ark Investment's Big Ideas 2023 research report, Wood emphasized that the inherent scarcity of assets is a key driver of demand growth.
In response to criticism of BTC's speculative nature, Wood argued that both act as stores of value, parallel to gold. He also pointed out that BTC's annual supply growth rate has recently declined to 0.9%, which is lower than gold's long-term average supply growth rate of 1%, which means BTC is more scarce than gold. did.
Wood said that while gold can lead to increased supply in a rising price environment, BTC is unable to do so due to its decentralized mechanism. “Like gold, Bitcoin is secure due to its scarcity, but unlike gold, it is backed by the world's largest computing system, making it the world's most secure network.” she explained. This mathematical scarcity, and its decentralized, rules-based design, is what distinguishes BTC as a fundamentally new-age financial asset, Wood argued.
Wood primarily attributes the sudden boom in digital asset adoption to the COVID-19 pandemic, as it has led to an uptick in investment by younger investors who traditionally have not met individual certification standards. She says it “inspired” a period of financial self-education. This change is also recorded in statistics. 63% of people invested in cryptocurrencies in 2021 during the pandemic, with the majority of adopters being Millennials and Gen Z.
