The price of the leading cryptocurrency could rise by another $500,000 thanks to institutional activity. This view was expressed by Ark Invest founder Cathie Wood in an interview with CNBC.
According to her, such investors are seeking opportunities outside traditional asset classes and are moving into cryptocurrency “right now”.
“The reason this is happening, to some extent, is that this is a new asset class with correlations different from others,” Wood emphasised.
If institutional managers allocate about 5% of their portfolios to Bitcoin, it could add $500,000 to its current price, she conceded.
“Institutional managers should look at new asset classes with low correlations, which are key to diversification and the holy grail in terms of asset allocation,” the Ark Invest founder concluded.
On December 9 the price of Bitcoin failed to hold above $50,000—a 2.8% drop over 24 hours (CoinGecko). At the time of writing, BTC was trading around $48,170.
The declines came amid ongoing troubles at the two largest Chinese developers.
On December 7 Kaisa Group Holdings missed payments on its dollar-denominated bonds totaling $400 million. They carry no grace period. On December 8 trading of the company’s shares on the Hong Kong Exchange was suspended.
On the next day Fitch Ratings downgraded the issuer’s foreign-currency rating for Kaisa Group Holdings to “restricted default”. restricted default.
On December 9 Fitch also downgraded the China Evergrande Group holding and its subsidiaries to “restricted default” due to the non-payment of two coupon payments after the grace period expired on Monday.
In early November Bitcoin pulled back from its all-time high on news of Evergrande’s potential default. The leading cryptocurrency shed almost 9%, having broken below $63,000.
4 December the AFP reported that the Chinese government summoned the founder of the developer amid warnings about the lack of “guaranteed” funds to meet financial obligations. This coincided with a crash in the cryptocurrency market.
Galaxy Digital Research analysts attributed the declines to a general nervousness stemming from the emergence of a new COVID-19 variant named “Omicron” and the statements by the Fed chair Jerome Powell about accelerating the pace of tapering the bond-buying program.
As reported, investor-billionaire Louis Navellier warned that Bitcoin could fall to $10,000. He said that, on the chart of the leading cryptocurrency, there is a growing signal of a “double top” pattern, which could play out as the Fed normalises monetary policy.
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