Why Cathie Wood believes bitcoin will still reach $1 million by 2030 and benefit from the FTX collapse
by James · November 29, 2022
Cathie Wood’s bold $1 million bitcoin call surprised many on Wall Street amid the fallout in the crypto industry, and here’s how the investor came up with the prediction. The ARK Invest CEO sees the world’s largest cryptocurrency reaching around $1.3 trillion by 2030, benefiting from the FTX turmoil, she said during the latest CNBC PRO Talks installment with Dominic Chu. “If anything, we think this cycle has benefited bitcoin,” Wood said. “Sam Bankman-Fried didn’t like bitcoin… Because it couldn’t be controlled. It was decentralized, open, transparent the antithesis of what FTX was.” “Bitcoin and ethereum, I would add, have excelled in this time period as some of these opaque closed, centralized ecosystems have gone bankrupt, gone down,” Wood added. Bankman-Fried’s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy protection. FTX indicates that it has more than 100,000 creditors, assets in the range of $10 billion to $50 billion, and liabilities in the range of $10 billion to $50 billion. Distressed crypto firm BlockFi has also filed for Chapter 11 bankruptcy protection following the implosion of putative acquirer FTX. Bitcoin briefly sank to a two-year low as digital coins fell following the fallout from FTX’s demise. The cryptocurrency rebounded above $16,000 as of Tuesday. Wood, a longtime crypto bull, believes that the price of bitcoin could rise if companies continue to diversify their cash and institutional investors continue to allocate 5% of their portfolio to the space. The innovation investor believes institutions are now allocating around 2.5% to cryptocurrencies in their portfolios, less than the percentage of exposure they started adding to real estate in the 1970s and emerging markets in the 1980s. “Crypto is the new asset class,” Wood said. “We still expect bitcoin to come in handy. I think when this story is told and the a-ha moments take place, ‘wait. Sam Bankman-Fried didn’t like Bitcoin. Oh, for a reason. What reason?’ This is why it can end up increasing credibility.” Wood bought several crypto-related assets in the past two weeks during the crisis, including Grayscale Bitcoin Trust and Coinbase. ARK said in a recent newsletter that there were “several silver linings” to these events, including that the bitcoin blockchain continued to operate during FTX’s crisis and argued that this would push the industry to become more transparent.
