Bitcoin the largest cryptocurrency, is expected to rise over the next four years, propelling its market capitalization to $16 trillion by 2030, Ark Invest said in its annual research report, Big Ideas.
The more than 10x growth — the market cap is currently around $1.5 trillion — will be driven by accelerated institutional adoption and crypto’s evolution into an asset class that features in investment portfolios around the world, the Cathie Wood-led investment firm said. This represents a compound annual rate of approximately 63%.
Bitcoin’s growing popularity will help grow the broader digital asset market to around $28 trillion by the end of the decade, according to the report. It’s currently around $2.7 trillion, according to CoinDesk data. This also means that the price could increase: even if all 21 million BTC were in circulation by then, which would not be the case, one bitcoin would be valued at more than $730,000.
Wood has long been bullish on Bitcoin. In January, Ark Invest predicted a price range of between $300,000 and $1.5 million by 2030. In February, Wood reiterated its appeal as a hedge against inflation and deflation, driven by technological acceleration.
“Bitcoin is emerging as the leader of a new institutional asset class,” the report said, supported by its adoption by exchange-traded funds (EFTs), corporate treasuries and sovereign entities.
Institutional ownership, primarily of bitcoin, is already growing rapidly. U.S. ETFs and public companies held about 12% of the total bitcoin supply at the end of last year, an increase from about 9% a year earlier, according to the report.
The move reflects a shift in how Bitcoin is viewed. Once seen primarily as a speculative asset, it is increasingly seen as “digital gold,” a macro hedge and reserve asset alongside traditional stores of value.
He adds that even modest penetration into institutional holdings, as little as 2.5% of an estimated $200 trillion global portfolio, excluding gold, could contribute around $5 trillion to Bitcoin’s total valuation.
The report also predicts that bitcoin will capture around 40% of gold’s total market value, which it currently estimates at just over $24 trillion, implying nearly $10 trillion in additional upside from the “digital gold” narrative alone.
Further contributions to bitcoin’s growth would come from emerging demand for a neutral reserve asset, where even just 0.5% penetration of a monetary base below $68 trillion could add around $339 billion in value, as well as allocations from nation-states and corporate treasuries that could each contribute hundreds of billions of dollars more.
