Inclusion of the first cryptocurrency in institutional investors’ portfolios with a share of only 2.5% would lead to a price rise to $200,000 per coin. This view was expressed by specialists at Ark Investment Management in their annual report.
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Increasing Bitcoin’s share to 6.5% could push the price to $500,000.
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To reach such a level, it will also be enough for companies included in the S&P 500 index to convert 10% of their cash reserves into digital gold, Ark Invest noted, pointing to the example Square and MicroStrategy.
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Analysts are confident that institutional investors should pay attention to Bitcoin, as the asset “offers one of the most compelling risk-reward trade-offs.”
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“In our view, fund managers should consider the possible price of ignoring Bitcoin as part of a new asset class,” they added.
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Based on daily asset-class returns over the past decade, analysts determined that the share of digital gold in a portfolio should range from 2.5% at minimum volatility to 6.5% to maximize profits.
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Ark Invest specialists emphasised that the current rise in Bitcoin’s price is more fundamental than the 2017 rally. In their view, over the next 5-10 years Bitcoin’s market capitalization could rise to $1-5 trillion.
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Earlier, the chief operating officer of investment firm SkyBridge Capital, Brett Messing, also believes that institutional money could boost Bitcoin to $500,000.
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