Bitcoin’s price target could skyrocket to $2.4 million by 2030, according to ARK Invest, driven by declining exchange balances and bullish sentiment.
ARK Invest Raises 2030 Bitcoin Price Target to as High as $2.4 Million in Bullish Scenario
The recent rally of ‘bitcoin’ to $93,000 is supported by declining exchange balances, with Glassnode showing a drop from 3 million BTC in November to 2.6 million BTC.
A Shift in Sentiment: Declining Exchange Balances
Declining exchange balances indicate that more ‘BTC’ is being withdrawn into private wallets, a sign of long-term holding behavior. According to Glassnode data, this trend reinforces the growing bullish sentiment around the cryptocurrency.
Revised Price Targets: A Reflection of Active Supply and Institutional Adoption
ARK Invest has raised its decade-end bitcoin price target to as high as $2.4 million apiece after revising its assumptions on active supply, which excludes lost or long-held coins. The largest cryptocurrency by market value was recently trading around $94,000.
Ark Invest is a global investment management firm founded in 2014 by Catherine Wood.
The company focuses on disruptive innovation and invests in companies that are driving technological advancements.
Ark's flagship ETF, ARK Innovation (ARKK), has gained significant attention for its high-risk, high-reward approach to investing.
As of 2022, the fund holds over $20 billion in assets under management.
Ark Invest is known for its concentrated portfolio and long-term investment strategy.
Bullish Projection: A 72% Compound Annual Growth Rate (CAGR)
The bull-projection figure, 60% more than its January 2024 estimate, reflects a 72% compound annual growth rate (CAGR) from last December through the end of 2030. This represents a significant increase in price target compared to previous estimates.
Base Case and Bear Case Estimates
The base case estimates a BTC price of $1.2 million — a 53% CAGR — while the bear case projects $500,000, equating to a 32% CAGR. These estimates reflect different scenarios for active supply and institutional adoption.
CAGR, or Compound Annual Growth Rate, is a financial metric that calculates an investment's average annual return over a specified period.
It represents the rate at which an investment grows in value each year.
To calculate CAGR, one divides the final value by the initial value and takes the nth root of the result, where n is the number of years.
For example, if a $1,000 investment grows to $2,500 over 5 years, its CAGR would be approximately 16.3%, indicating a significant increase in value.
A Model-Based Approach: David Puell’s Analysis
David Puell, an analyst at ARK Invest, used a model based on total addressable market and projected market penetration across several sectors. These include institutional investment, bitcoin’s role as ‘digital gold,’ its use as a haven in emerging markets, adoption for nation-state and corporate treasury holdings, and on-chain financial services built on the bitcoin network.
A Decade of Growth: The Bitcoin Price Target
The revised price target of $2.4 million represents a significant increase from previous estimates. This growth is driven by assumptions on active supply and institutional adoption, reflecting a bullish sentiment around the cryptocurrency.
Bitcoin's price is determined by supply and demand on cryptocurrency exchanges.
It has experienced significant fluctuations, with a high of around $64,000 in April 2021 and a low of approximately $3,200 in March 2020.
The price is influenced by factors such as adoption rates, regulatory changes, and global economic conditions.
As of the latest data, Bitcoin's market capitalization ranks it among the top five cryptocurrencies.
