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Ark Invest CEO Cathie Wood says many institutional investors have yet to enter the crypto space
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She adds that institutions still dedicate only small portions of their portfolios to Bitcoin and that Bitcoin’s price could reach $500,000 if hedge funds and other large investors allocated just 5% of assets to the asset
Cathie Wood, the U.S. investor whose popularity has surged recently thanks to her distinctive investment strategies, has once again reiterated her price forecasts for Bitcoin.
This is not the first time Wood has predicted how high the cryptocurrency might climb. The CEO of Ark Invest recently restated an optimistic outlook, saying she expects Bitcoin to eventually exceed $550,000 over the coming years.
In a CNBC interview on Thursday she repeated that forecast and emphasized her belief that increased inflows from large institutional investors could push Bitcoin’s value to $500,000.
Wood pointed out that institutions would need to allocate only about 5% of their portfolios to Bitcoin to drive the price toward $500,000 from current levels.
She stressed that such allocation by large funds does not have to happen overnight but can occur gradually over time. Ultimately, she still sees Bitcoin reaching her earlier $550,000 projection, a scenario that would require roughly a tenfold increase in the cryptocurrency’s market value.
The “holy grail” of asset allocation
Wood suggested that the crypto sector has been steadily attracting substantial capital from hedge funds and other institutional investors, a trend that is likely to benefit Bitcoin.
According to her, crypto’s appeal today stems from investors’ desire for alternatives beyond stocks, bonds, and other traditional instruments.
She said the asset class currently fits the profile institutions are seeking. In this “new asset class,” she told CNBC that Bitcoin and Ethereum are the two primary beneficiaries of institutional interest.
As investors search for fresh ways to diversify portfolios, Wood said the key is identifying assets that show low correlation with existing positions.
She noted that this approach helps portfolio managers achieve genuine diversification, calling such an outcome the “holy grail” of asset allocation.