ARK Invest CEO Cathie Wood says large institutional entities with strong hands are moving into Bitcoin (BTC) in a hurry.
In a new interview with Barron’s, Wood says that institutions have their eye on Bitcoin partially because of its lack of correlation with other assets.
“We can see who’s moving in and it looks like strong, institutional holders are moving in [to Bitcoin]. Why are they moving in? Because the correlation of returns among crypto, especially Bitcoin, and other assets – stocks, bonds, currencies, commodities – are very low.
Studies tell us that if there’s a low correlation of returns among assets, [buying] that asset with the low correlation, you will be raising returns and lowering risk over time.”
While bullish on BTC, Wood said the trend of companies such as Elon Musk’s Tesla adding it to their balance sheet caught her by surprise.
“What we didn’t expect when we did our own study on Bitcoin, we didn’t expect institutions, mainly corporations, to begin diversifying their cash on the balance sheet into Bitcoin.”
Wood went on to maintain her previous Bitcoin price prediction of $500,000, saying that an uptick in institutional investing could make it a reality.
“The reason we’ve used the $500,000 mark for a Bitcoin price target is that if institutional investors move into Bitcoin and allocate 5% of their portfolios to it, by our estimates Bitcoin will go up by $500,000. We can tell this is happening by looking at on-chain analytics.”
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/DanieleGay