Bitcoin the largest cryptocurrency, is set to soar over the next four years, boosting its market value to $16 trillion by 2030, Ark Invest said in its annual research report, Big Ideas.
The more than 10-fold growth – the market capitalization is currently around $1.5 trillion – will be driven by accelerated institutional adoption and crypto’s evolution into an asset class found in investment portfolios worldwide, the Cathie Wood-led investment firm said. That’s a compound annual rate of about 63%.
Bitcoin’s increased popularity will help drive the broader market for digital assets to about $28 trillion by the end of the decade, according to the report. It’s currently around $2.7 trillion, according to CoinDesk data. It also means the price could rise: even if all 21 million BTC were in circulation at the time, which they wouldn’t be, one bitcoin would be valued at more than $730,000.
Wood has long been bullish on bitcoin. In January, Ark Invest predicted a price range of $300,000-$1.5 million by 2030. In February, Wood reiterated its appeal as a hedge against inflation and deflation, driven by technological acceleration.
“Bitcoin is maturing as the leader of a new institutional asset class,” the report said, supported by adoption across exchange-traded funds (ETFs), government bonds and government entities.
Institutional ownership of primarily bitcoin is already rising rapidly. U.S. ETFs and public companies held about 12% of the total bitcoin supply at the end of last year, up from about 9% a year earlier, the report said.
The move reflects a shift in how bitcoin is perceived. Once seen primarily as a speculative asset, it is increasingly viewed as “digital gold”, a macro hedge and reserve asset alongside traditional stores of value.
It adds that even a modest foray into institutional holdings, as low as 2.5% of an estimated $200 trillion global portfolio excluding gold, could contribute about $5 trillion to bitcoin’s overall valuation.
The report also predicts that bitcoin will capture an estimated 40% of gold’s total market capitalization, which it estimated at just over $24 trillion currently, implying nearly $10 trillion in additional upside from the “digital gold” narrative alone.
Other contributions to bitcoin’s growth would come from growing demand for a neutral reserve asset, where even just a 0.5% penetration of a lower $68 trillion monetary base could add about $339 billion in value, along with allocations from nation-states and corporate treasuries that could each contribute several hundred billion dollars.
