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Cathie Wood's Bitcoin price prediction targets $500,000

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(Kitco News) - ARK Invest CEO Cathie Wood believes that the bitcoin price will cross $500,000 in the next five years, a tenfold-plus jump from the leading cryptocurrency's current price of $46,700.

Wood is also bullish on Ethereum, the second-biggest cryptocurrency based on market cap, thanks to a major upgrade that is making the network faster and cheaper. She favors a cryptocurrency portfolio with a 60/40 allocation comprising Bitcoin and Ethereum, respectively.

Wood gave her outlook at the SALT Conference, a thought leadership event started by Anthony Scaramucci's Skybridge Capital. Wood's ambitious forecast comes as the Bitcoin price has struggled to revisit the $50,000 threshold since seeing that level earlier this month. However, the Bitcoin bulls are not worried and suggest that the pullbacks are par for the course.

ARK Invest's Wood is basing her bitcoin price prediction on the belief that a couple of significant industry trends will not abate. In particular, Wood mentioned companies continuing to "diversify their cash into something like Bitcoin," a trend ignited by MicroStrategy CEO Michael Saylor first directing treasury assets into the leading cryptocurrency last year. Jack Dorsey's Square and Elon Musk's Tesla have since copied that playbook.

Wood is also banking on institutional investors continuing to come off the sidelines and putting 5% of their assets into Bitcoin or other cryptocurrencies.

"We believe that the price will be tenfold of where it is today," said Wood at the conference.

Meanwhile, the Ethereum price has already skyrocketed more than 300% so far this year, as the decentralized finance (DeFi) and non-fungible token (NFT) crazes have caught on like wildfire. Most of those projects are built on the Ethereum blockchain. Wood described it as an "explosion in developer activity," adding:

"I'm fascinated with what's going on in DeFi, which is collapsing the cost of the infrastructure for financial services in a way that I know that the traditional financial industry does not appreciate right now."

Crypto Regulation

The $22 billion ARK Innovation ETF holds shares of cryptocurrency exchange Coinbase, which has been going head-to-head with the U.S. SEC. Coinbase boasts 67 million user accounts and got under the skin of regulators when it revealed plans to launch a cryptocurrency lending platform in the United States. Now the SEC is threatening to sue Coinbase.

Wood said she was "shocked" that the SEC issued a Wells notice to Coinbase, particularly since the lending platform has not been released yet. She chalked it up to the fact that innovation in the cryptocurrency industry is happening at lightning speed and regulators believe it's time to get the courts involved.

She pointed to Toronto-based digital asset manager 3IQ Corp, whose Bitcoin ETF only saw the light of day because the firm went up against the Ontario Securities Commission in court and received a favorable ruling. 3IQ's Bitcoin ETF now oversees more than C$ 1 billion in AUM.

"I am beginning to think Coinbase doesn't mind this at all. If you saw the stock reaction, it hardly budged," said Wood at the conference.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.