Bitcoin Price Could Rise Another $ 500,000 As Institutional Investors Look For Uncorrelated Assets, Says Cathie Wood

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The price of Bitcoin could climb to $ 550,000 as institutional investors increase allocations to space, according to Cathie Wood.

Wood told CNBC on Thursday that institutions are looking to gain exposure to uncorrelated assets and crypto does the trick.

“The move from institutions to bitcoin could add $ 500,000 to the price of bitcoin if they hit around 5% over time,” said Wood.

The price of bitcoin could climb to over $ 500,000 as institutional investors begin to allocate to the relatively new cryptocurrency space, Ark Invest’s Cathie Wood told CNBC in an interview Thursday.

Wood explained that institutions are always on the lookout for investments that are uncorrelated to traditional asset classes such as stocks and bonds, and crypto fits that bill.

“I think the institutions are settling down [to crypto] right now, ”Wood said, adding that they currently prefer the two biggest cryptocurrencies, bitcoin and ether. Overall, according to Wood, institutions have virtually no exposure to space.

“The reason institutions are moving in is, to some extent, that this is a new asset class with very different correlations to other asset classes,” Wood explained. A study conducted by Ark Invest found that the asset with the closest correlation to bitcoin is real estate.

This flies in the face of the widely held belief that cryptocurrencies are risky assets that move alongside larger movements in the stock market. For example, in the midst of the Omicron-induced market sell-off last week, bitcoin entered a bear market, falling more than 20% from its recent high.

“Institutional managers need to look at new asset classes that evolve, that have low correlations, this is the key to diversification, and it is the holy grail in terms of asset allocation,” said Wood. .

If institutions moved around 5% of their wallets to bitcoin over time, Wood believes that would add $ 500,000 to the current price of bitcoin, down to around $ 550,000 based on the current price of bitcoin. This represents a potential increase of 1000% from current levels.

Read the original article on Business Insider

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