ARK Invest: Bitcoin could reach $2.3m if its share of global investments is 19.4%
ARK Invest: Bitcoin could reach $2.3m if its share of global investments is 19.4%
According to ARK Invest, Bitcoin (BTC) is an effective risk diversifier and counterweight to traditional asset classes, so its optimal allocation in a global investment portfolio in 2023 was 19.4%.
The 19.4% allocation in the global investment portfolio is a significant increase from an allocation of 0.5% in 2015 and 6.2% in 2022, underscoring Bitcoin's growing acceptance.
"Over the past seven years, Bitcoin's annualized returns have significantly outperformed the major asset classes, with the optimal allocation increasing to 19.4% in 2023. Our analysis shows that a 19.4% allocation to Bitcoin investments in 2024 would maximize the portfolio's risk-adjusted return," ARK Invest said in its Big Ideas 2024 report.
ARK Invest believes that allocating funds from the $250 trillion global investable asset base to Bitcoin would have a significant impact on its price. For example, an allocation of just 1% to BTC could drive its price to $120,000, 4.8% to $550,000, and 19.4% to $2,300,000.
Such a prediction underscores Bitcoin's growing influence on the global investment landscape.
"Bitcoin is not just a new investment option but an essential component for diversifying investment portfolios," ARK Invest reports.
The report focuses on the key drivers of Bitcoin's growth this year, chief among them the halving in April 2024. The halving will divide BTC's inflation rate from 1.8% to 0.9%, which will impact its value.
In addition, the global perception of BTC will change as more investors view the asset as a strategic tool to diversify and spread risk in their portfolios.
The report also notes that most of the negative factors for Bitcoin have come to an end, including FTX and Celsius, which is positive for the resumption of BTC's bullish rally.
