Renowned tech stock-based investment manager Cathie Wood is keeping her bet on the price Bitcoin could reach by 2030. According to the CEO of the fund Ark Investment Managementthe value of the pioneering cryptocurrency would reach $1 million.
During a brief conversation with Kate Rooney, presenter of the program crypto world from CNBC, Wood touched on important topics related to cryptocurrencies. Among these, the forecast of a sharp rise in the price of the pioneering digital currency stands out.
In addition, he referred to the world of decentralized bonds (DeFi) and highlighted that traditional banks are in “a big problem.” With this he implied that financial institutions are forced to reinvent themselves and adapt before the crypto world sends them to the museum.
The price that Bitcoin will have in eight years
The interview with Wood took place in Miami, precisely during the Bitcoin 2022 conference that is being held until today in that American city. There he explained that the price of that cryptocurrency is destined to rise unstoppably in the coming years..
And the reasons for this to happen are not few. “It is not just that it is a hedge against inflation or that it becomes a border payment system”, he expressed. He said that the qualities of that coin are many and when they come together they will cause the rise to a million dollars per coin.
Eight years ago (April 2014) the price of this coin was $283. Since then the performance has been overwhelming, which has taken its value to the current $42.2 thousand dollars per coin. This is a 15,000% return over the period of those eight years and all this despite the sharp falls it had along the way.
This opens up a range of possibilities to get an idea of what the price of this cryptocurrency will be in the next 8 years. It must be said that in this period to come until 2030, it would not need a rise of 15,000% as in the previous eight years, but of 2,400% to reach the million dollars that Wood envisions..
Some variables that could influence the value of Bitcoin
From 2014 to 2022, the price of Bitcoin rose 15,000% with a weak market and considerably tiny user base. Also, in that period, the exchange platforms were just taking their first steps, so the adoption was extremely low.
Now, with trading volume and level of adoption at all levels and not just from retail investors, the potential looks strong.. The currency is becoming a very tempting investment for large companies, funds and financial personalities and even spot ETFs are expected on the stock market after the appearance of the first futures ETFs since the end of 2021.
The political instability of the current context must also be added. The next few years will be one of great changes and alterations in the markets. This translates into possibilities for Bitcoin to be a long-term haven of value. With all this, Wood implies that it would be surprising if the price of the digital currency does not reach one million US dollars.
On the other hand, the CEO of ark invest underlines that regulatory institutions are taking very positive steps. She explained that a short time ago, the United States Treasury Secretary, Janet Yellen, presented all the symptoms of the naysayers who need to dig deeper to understand this cryptocurrency. However, the official appears to be on the mend, says Wood. “What we are seeing now is a 180 degree turn from last year.”, he pointed.
It is almost certain that Bitcoin will not be banned
Another aspect that can influence is that the regulations of use assume that the digital currency will no longer be illegal. This opens the doors for Bitcoin to have a citizenship card so that investors from all financial sectors bet on it.
Wood assures that the ground is being prepared with companies in the midst of fighting to obtain the dominant cryptocurrency wallet.. In other words, ensures that the exchanges What base of coins The Robin Hood they are just preparing to position themselves in what will be the mass adoption of cryptocurrencies. “I think Bitcoin is just getting started” he underlined.
On the other hand, he mentioned that scalability concerns are no longer the main headache for enthusiasts. Now, with the second layer, he said, the movement of transactions goes to another level and the slowness in the blockchain is avoided, with which high transaction fees could become a thing of the past.
The second layer that the investor talks about is lightning networkwhich allows instant Bitcoin transactions. In addition, the commissions drop to almost zero, in addition to the fact that it could function as a cross between several blockchains.. Prior to this new layer, the scalability of Bitcoin allowed, in the best case, seven transactions per second and now it would exceed 50 thousand per second.
The number of platforms that are being integrated into this layer is increasing. “This is critical and directly related to the spread of Bitcoin around the world.”, he expressed. Also, he added that lightning network He has been in “numerous tests over the years, but now the second layer solution is more robust and the number of channels in it last year almost tripled”.
The same prediction from January
Just starting this year, this renowned figure in venture investing ensured that the price of Bitcoin would reach $1 million. The expected date for that would be 2030, that is, it is the same prediction that it makes now. Regarding this, he says that many of the analyzes on technology are alarmist because they are based on the short term.
“Only one bad move by the FED is enough for the US economy to inevitably approach a recession”
In the same way as tech stocks, the price of Bitcoin will go up, consider. Among the reasons that reinforce this statement, it emphasizes that this cryptocurrency can be used without impediments by people as a shield.. Some totalitarian regimes would try to confiscate people’s money for reasons of thought, for example. It is in this scenario that this cryptocurrency will become important thanks to its security and relative privacy.
As already said, Wood argues that the use cases are increasing and there will come a time when it will be difficult to enumerate them.. Inflation, he explains, is one of the elements that will play strongly in favor of the crypto market, especially now that “the Federal Reserve is playing with fire”.
With the latter, he refers to the rapid changes in monetary policies that the US central bank is implementing. According to the investor, only one bad move is enough for the economy of that North American country to inevitably approach a situation of recession.
The recession is seen with some signs
In a recent post on your social network account TwitterWood said central bank officials could be making mistakes. The aggressive plans to raise interest rates for this year generated nervousness in a large part of the investors who have their capital in bonds.
As a result, the 2-year and 10-year bond yield curve inverted. Consequently, the first outperformed the second, which is the opposite of normal, since investors generally expect higher returns in the long term. When that reversal happens, it is seen as a clear signal of recession. Currently this alarm signal is pushed by increases in interest rates.
The advantage for the price of Bitcoin is that it could be a refuge from the difficult moment that can be generated from the movements of the FED. In Wood’s view, the central bank should slow down the rate of hikes, since the bond market is sending clear signals not to do so.
“The Fed may want to play tough, but the bond market will give them an even starker warning that they are playing with fire.“, wrote. In the middle of last month, the Federal Reserve raised interest rates for the first time since 2018. From a level between 0% and 0.25%, it placed them between 0.25% and 0.5%. A further rise of 0.5% was expected, but given the circumstances, it could be 0.25% again.
Banks have a “big problem”
Parallel to the predictions about the price of Bitcoin, Wood assured that the banks already feel the pressure of the new technology. By this he refers to decentralized finance (DeFi), which has been gaining ground against traditional banking services.
“The interest that investors are showing in DeFi applications could threaten the power of banks”, he expressed and pointed out that “there is a change of actions”. He expressed that the financial entities know that within the financial world related to cryptocurrencies they are creating a great headache that is not simply about Bitcoin.
“The banks have a big problem. They are losing talent to crypto, so they have to raise wages to attract quality workers. Also, they are losing business to DeFi. Lending and saving, a lot of that is happening within decentralized finance”, he remarked.
DeFi is a universe of financial services that were previously restricted to traditional banks. However, now they are at the hand of millions of people without major obstacles such as banking, since all these services operate without the need for trusted third parties.. Similarly, it is highlighted that the yields of these applications are much higher than in centralized banking.