In its annual report "BIG IDEAS 2024", Ark Invest mentioned analysis of AI, Bitcoin, public chains, electric vehicles, robots, 3D printing and other fields. The following is a summary of the Bitcoin link.
Table of contents
ToggleChapter 3: Asset Allocation of Bitcoin
This chapter mainly talks about how much money investors should allocate to Bitcoin on the premise of controlling risks and maximizing returns?
In addition, Ark also mentioned that if about 19% of global investable assets are invested in Bitcoin, Bitcoin will reach US$2.3 million.
Bitcoin surpasses all mainstream assets in the "long-term time frame"
Ark counts the performance of gold, commodities, real estate, bonds, stocks, emerging markets and other assets over the past few years and points out that Bitcoin’s annualized returns have surpassed all mainstream assets in the long run.
But saying this seems unfair to mainstream assets. After all, mainstream assets have a long history and their fluctuations have long since stabilized. Looking at the past three years, the average annual growth rate of Bitcoin is still slightly lower than that of commodities.
Bitcoin’s correlation with traditional finance remains low
Although Bitcoin futures and spot ETFs have come out one after another, it seems that they have not yet been completely "tamed" by traditional finance.
Ark pointed out that Bitcoin’s correlation is low at 0.27 compared with traditional asset classes, but it is even lower for gold and commodities.
Bitcoin optimal allocation proportion: 19.4%
If a five-year investment cycle is set based on risk-maximizing adjusted returns, Ark pointed out that the allocation ratio should be:
Gold: 40.7%
Stocks: 30.2%
Bitcoin: 19.4%
Commodities: 9.6%
How did Bitcoin reach $2.3 million?
Last year, Ark made predictions based on different environments such as bull and bear markets, believing that Bitcoin would reach US$258,500 to US$1.48 million in 2030.
This year, Ark divided the allocation proportion of Bitcoin based on the US$250 trillion of "global investable assets", as follows:
Invest 1% and Bitcoin will reach: $120,000
Invest 4.8%: $550,000
Investment 19.4%: US$2.3 million
Chapter 4: Bitcoin in 2023
Ark details how Bitcoin recovered from the many negative events in 2022, and showed its resilience as a safe-haven asset in 2023. It also mentioned the changes brought about by the advent of Bitcoin spot ETFs.
Bitcoin rises 155% in 2023
This chapter begins with Bitcoin’s 2023 full-year trend and marks most of the major events, from the Silicon Valley banking crisis at the beginning of the year to the resignation of Binance founder CZ(CZ) as CEO at the end of the year.
Bitcoin's lead has also pushed the total market value of cryptocurrencies to $827 billion.
Ark’s reliable indicator: on-chain market average
The report pointed out that Ark has always used the on-chain market mean as the original indicator, which has always been a reliable dividing line for identifying the rise and fall of Bitcoin. From past trends, it can be found that when the Bitcoin price is higher than the on-chain market mean, Usually in the early stages of a bull market.
Bitcoin is an asset safe haven
During the banking crisis in the United States in March last year, the U.S. KBW Bank Index plummeted, while Bitcoin climbed rapidly, rising more than 40% as of May, emphasizing its role as a risk hedging asset.
Bitcoin’s four major catalysts in 2024
Bitcoin Halving: Expected Inflation Rate Drops from 1.8% to 0.9%.
Institutional Adoption: BlackRock CEO Larry Fink has also changed his mind about Bitcoin significantly.
Bitcoin spot ETF: further reduce the learning curve of investing in BTC and reduce the operational complexity.
- Regulatory developments: Bankruptcy cases such as Celsius and FTX have promoted regulatory developments, including the implementation of the EU MiCA Act.
Ark's annual forecast report has certain reference value, especially since the founder has been optimistic about Bitcoin for a long time, and the research team has also conducted in-depth research on Bitcoin. The advantages of Bitcoin listed in the report, such as scarcity, security, globalization, etc., All have a certain degree of persuasion.
However, some of the predictions and positions in the report are worthy of discussion, especially since Ark is also one of the issuers of Bitcoin spot ETFs, and looking back at Ark's past predictions, it is always too optimistic about the bullishness of Bitcoin.
( Ark Investment: Bitcoin spot ETF price will exceed $1.5 million in 2030 after passing )
