ARK Invest, in its report released on Thursday, pointed out that if the allocation of global investment assets (estimated at $250 trillion) to Bitcoin reaches the optimal allocation ratio (19.4%), the price of Bitcoin could reach $2.3 million.
The report, titled “Big Ideas 2024,” explores the impact of technology on global industries and economies, as well as the fusion of technology and connectivity. The report covers a wide range of topics, including the role of Bitcoin in investment portfolios and potential catalysts for Bitcoin price trends in 2024.
According to ARK Invest’s prediction, the growth in global asset allocation to Bitcoin could 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 allocation ratio of global 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%. A lower allocation ratio may result in suboptimal returns, while a higher allocation ratio may expose investors to unnecessary risks.
The report by ARK Invest also points out that in terms of long-term investment returns, Bitcoin outperforms all major asset classes such as gold, stocks, or real estate. Bitcoin’s compound annual growth rate (CAGR) is 44%, far surpassing the average CAGR of 5.7% for the average asset class.
ARK Invest emphasizes the long-term feasibility 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 by ARK Invest 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. Based on this research, past halving events have triggered bull markets, indicating that the upcoming halving event may have a similar impact.
According to CoinMarketCap data, as of the time of this article, there are only 75 days left until the Bitcoin mining reward halving (around April 6th).
Risk disclaimer: This content is for informational reference only and does not represent the stance and investment advice of this website. Readers must conduct their own careful evaluation.
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