Institutional purchases will take Bitcoin to $ 500,000 in five years, Cathie Wood

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Cathie Wood is no longer a barely recognizable name in the bitcoin space. The CEO of ARK Invest has become one of the most prominent supporters of the digital asset. Wood had pitched his tent with bitcoin a long time ago and hasn’t looked back since then. In fact, she turned out to be one of the most bullish in the space with her predicted value of bitcoin at $ 500,000.

Wood had previously placed the asset at the correct value at various times in the past and she seems unwavering in her resolve after reiterating her position on the matter. Once again, the CEO has come to defend her belief in the exact. In the long run, she sees assets exceed $ 500,000, bringing the time to just five years.

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What will drive Bitcoin to $ 500,000?

ARK Invest CEO Cathie Wood appeared on Barron’s on Wednesday. In the interview, the CEO explained her expectations for bitcoin and what she thought would drive the digital asset there. The first thing was the institutional buyouts in the asset.

It’s no secret that institutional investors have increased their stakes in the digital asset market. Entries for the year broke the record set in 2020 with two more months to go in the year. Total assets under management for bitcoin have grown rapidly and are now at an all-time high of $ 56 billion, according to the latest report from CoinShares. This increased momentum, Wood says, is what would drive bitcoin towards $ 500,000.

BTC price recovers from decline | Source: BTCUSD on TradingView.com

Despite the rapid rate of investment by institutional investors, it is still estimated that less than 5% is allocated to bitcoin. However, the trend is growing among the big pennies and Wood explained that if “institutional investors go into bitcoin and allocate 5% of their wallets” then bitcoin would hit $ 560,000.

The CEO expects that to happen, but sets the timeline in five years. This means that Wood sees the price of bitcoin exceed $ 500,000 by 2026, given current investment trends.

The proof is in the data

One thing that also confirms the CEO’s firm determination in this prediction is the data recorded on the bitcoin blockchain. Blockchain technology makes every transaction made public information and she explained that this data helps to see how money changes hands in space. “We can say this is happening through chain analysis,” said Wood.

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Although optimistic about the entry of institutional money into the digital asset, Wood had expressed surprise at the recent decision of companies such as Square, Tesla and MicroStrategy to diversify their balance sheets using bitcoin. However, the market expected this given that all of these companies have Bitcoin Maximalists at the helm.

Bitcoin’s low correlation with other cryptos can also be a compelling factor for institutional investors looking to invest in the space. “The correlation is very low,” said Wood, and since the correlation of returns on investing is low, institutions may well increase their returns and risk less over time, she added.

Featured image from PageOne.ng, chart from TradingView.com

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