Multiple analysts have suggested that the price of bitcoin could move to $400,000 in the future ad adoption for the flagship cryptocurrency keeps on growing and its circulating supply drops as adopters take coins out of the market.
Speaking to Yahoo Finance Cathie Wood, founder of asset management firm Ark Invest, which has argued that bitcoin is a “much bigger idea than Apple or Amazon,” suggested that if all companies in the S&P 500 index were to allocate just 1% of their cash to bitcoin, the price of the cryptocurrency would increase by approximately $40,000.
Similarly, a 10% allocation from these companies would see the price of bitcoin rise by $400,000. Wood said:
Bitcoin is only roughly a $600 billion market cap. So even half the size of Apple or Amazon, right now. Doesn’t that put it into perspective?
Corporate adoption of bitcoin has been growing over the last few months. Companies like Square and MicroStrategy were among the first to allocate a portion of their treasuries into BTC, with MicroStrategy investing $1.145 billion to buy 71,079 BTC, which are now worth over $3.2 billion.
According to Tesla’s latest annual report (on Form 10-K), which has been filed with the U.S. Securities and Exchange Commission (SEC), the electric car maker has already invested $1.5 billion in Bitcoin. It’s also planning on accepting cryptocurrency payments for its products in the near future.
As Bitcoinist pointed out, Guggenheim Partners chief investment officer (CIO) Scott Minerd says bitcoin’s fair value was pegged at $400,000 during an interview with Bloomberg back in December 2020. Speaking to CNN’s Julia Chatterley, Minerd said fundamental research showed BTC could go to $400,000 or even $600,000 based on its limited supply and being a safe haven asset.
On top of these predictions Peter Brandt, the analyst that correctly called bitcoin’s over 80% correction seen in 2018 after it reached its then all-time high near $20,000, has revealed BTC could correct back toward the $30,000 “without any damage to the market.”
Brandt added, however, that from 2015 to 2017 BTC endured three corrections above 30%, and that the current market has only experienced one such correction. While he pointed out he is not predictions these corrections would occur, these should be expected.
The fact that these corrections haven’t occurred, he said, shows “extreme underlying support and internal market strength.”
Featured image via Pixabay.