ARK Invest, in its report released on Thursday, pointed out that if the global allocation of investment assets (estimated at $250 trillion) to Bitcoin reaches its optimal allocation ratio of 19.4%, the price of Bitcoin could reach $2.3 million.
The report, titled “Big Ideas 2024,” explores the impact of technology on various industries and economies worldwide, as well as the fusion of technology and connectivity. It covers a wide range of topics, including the role of Bitcoin in investment portfolios and potential catalysts for the price trend of Bitcoin in 2024.
According to ARK Invest’s predictions, the global allocation growth of Bitcoin may have a positive impact on its price. ARK Invest estimates that if 1% of global assets are allocated to Bitcoin, the price could reach $120,000.
Based on a rolling 5-year investment period, if the global allocation ratio of investment assets to Bitcoin reaches 4.8% (the average maximum Sharpe ratio from 2015 to 2023), the price of Bitcoin could rise to $550,000. If this ratio reaches 19.4%, it could significantly increase the price to around $2.3 million.
According to ARK Invest, the optimal allocation ratio for Bitcoin portfolios in 2023 should be 19.4%. If the allocation ratio is below this level, it may result in suboptimal returns, while exceeding this ratio may expose investors to unnecessary risks.
The report from ARK Invest also highlights the long-term investment returns of Bitcoin. It states that Bitcoin outperforms all major asset classes such as gold, stocks, or real estate in terms of long-term investment returns. Bitcoin has an annual compound growth rate (CAGR) of 44%, far surpassing the average asset class CAGR of 5.7%.
ARK Invest emphasizes the long-term viability of Bitcoin investment, stating that regardless of Bitcoin’s volatility, holding Bitcoin for the long term can yield returns.
On the other hand, the report from ARK Invest also outlines four key catalysts that may impact the trajectory of Bitcoin development this year, including the launch of Bitcoin spot ETFs, Bitcoin halving, institutional adoption, and regulatory developments. According to this research, previous halving events have triggered bull markets, indicating that the upcoming halving event may have a similar impact.
According to CoinMarketCap data, at the time of this article’s publication, there are only about 75 days left until the Bitcoin mining reward halving (around April 6).
Disclaimer: This content is for informational purposes only and does not represent the views and investment advice of this site. Readers must conduct their own thorough evaluations.
