I Read Cathie Wood’s Ark Invest’s 132 Page “Big Ideas 2022” Report.. So You Don’t Have To
Doing the Lord's work (lol Cathie Wood would sure like that, wouldn't she) and giving you the juiciest bits in Ark Invest's Big Ideas 2022 report.
If you don’t know her, Cathie Wood is a fund manager (Ark Invest) who rose to prominence in 2020/21 after a series of very successful investments/market bets.
She has since had a bit of a fall from grace with the recent market sentiment erasing much of Ark Invest’s gains. But we don’t talk about that. So, shush!
Wood is a strong believer in disruptive technologies.
Think robotics, tomorrow’s batteries and genomics as well as blockchain technology and is perhaps the most bullish person on crypto erm…like ever?!
Cathie Wood recently predicted that BTC will be worth over $1M by 2030.
This isn’t really a soundbite as much as it’s based on research by Ark Invest’s analysts — research that Ark Invest’s analysts break down in their most recent “Big Ideas 2022.”
So, allow me to summarize the report’s highlights for you so you can make up your mind about whether you think this price prediction is reasonable (or not).
Ark Invest analysts predict that the market capitalization of blockchain technology will reach $49T in 2030.
That’s roughly half what the global equities market is worth today ($106T).
Cathie Wood predicts that more than half (57%) of that market cap will come from Bitcoin alone; believing Bitcoin’s market cap will climb to $28T by 2030. Currently, however, Bitcoin's market cap stands at $815B, down from an ATH of around $1.2T.
This directly contradicts what most analysts expect. Most people in the crypto-sphere believe that Bitcoin’s dominance (its share (%) of the entire crypto market cap) will continue to drop as the market matures and other cryptocurrencies become popular.
However, this is where Cathie gets her $1M/BTC price point from.
For a more detailed breakdown, refer to the end of this post.
According to Cathie Wood & Ark Invest, El Salvador’s Bitcoin “experiment” is already a resounding success.
This isn’t as controversial as her earlier claims. Here’s why:
# of people in El Salvador with a Bitcoin wallet = 3.8 million
# of people in El Salvador with a traditional bank account = 1.9 million
Therefore, % of eligible citizens with a Bitcoin wallet in El Salvador is 84% as of December 2021, versus 42% with a traditional bank account.
What’s more bullish is that people are actually using these wallets!
Bitcoin wallets in El Salvador settled (on average) $2M worth of transactions in remittances DAILY in the month of October 2021.
On an annual basis, this accounts for roughly 12% of ALL remittances sent to El Salvador (total = $6B annually, or 2% of El Salvador’s overall GDP)
Reader’s Note I — Remittances are money transfers sent from one party who works abroad to another in their home country (typically family).
And El Salvador is not alone..
2021 was the year that Bitcoin’s annual settlement volume surpassed that of Visa’s.
Bitcoin’s total came to a whopping $13.1T, or ~120% of Visa’s.
This is effectively a 5x increase on the previous year ($2.3T in 2020, ~24% of the Visa network). However, is the Bitcoin network becoming more dominated by larger investors with deeper pockets?! Well, probably.. yes.
The average value of each individual transaction in 2021 was $136,555.
This is up from $21,590 in 2020, significantly more than the increase in Bitcoin’s price over the same time period, which makes sense as ETFs, countries, and companies have all increased their BTC holdings/transactions in 2021 and now hold roughly…
1.5 million BTC or, 8% of the total circulating supply
The 5 largest publicly disclosed bitcoin wallets belong to:
Grayscale Bitcoin Trust
But what about me, you and the annoying Karen you try so hard to avoid on the school run, but somehow can never manage to?
Believe it or not, most Bitcoin investors in 2021 were not speculators.
The number of BTC long-term holders has been steadily increasing since 2011, except for a substantial “blip” back in 2018. That was understandable tbh.
This trend has continued throughout the most recent bull run in 2020/21.
Long-term investors now collectively hold 13.5m BTC, or more than half of all BTC.
Reader’s Note II — A “long term investor” is defined by Ark Invest as someone who has held their BTC for more than 155 days.
Reader’s Note III — Yes, they removed any wallets with “dust” BTC from the data.
So how does Cathie Wood arrive at the $28T BTC market cap by 2030?
Is she, like all of us, drunk on hopium?
I’ll give you the figures and let you make your mind up:
Reader’s Note IV — Important For Context..
Gold’s market capitalization is $10T (2021), while the global equities market has an overall market capitalization of $106T (2021). In their analysis, Ark Invest chose to project BTC’s 2030 market cap using 2021 data rather than “projected” 2030 data/guesswork.
Now For The Juice
BTC will become the new “digital gold” and account for a whopping 50% of gold’s market cap by 2030 — or, $5.5T.
More S&P companies will keep BTC on their balance sheets (like Tesla). Ark Invest estimates 5% of balance sheets will be kept in BTC — adding another $4.2T.
Institutions are not far behind and will keep 2.55% of assets in BTC — accounting for $4.1T.
High Net Worth Individuals will dedicate 5% of their portfolios to BTC — that’s another $4.0T right there.
Nation-states will keep 1% of their reserves in BTC — providing a further $3.8T in “value” to the market.
US Banks will get in on the action too and use BTC for 25% of all inter-bank settlements — that’s another $3.8T.
BTC will have replaced fiat currencies in emerging markets at a rate of around 10% by 2030 — or, $2.8T.
Finally, BTC will account for 50% of all global remittances — adding a relatively meager $0.3T.
Grand Total = $28.5T (equal to $1.36M/BTC)
Reader’s Note V — For those interested, I personally think some of these numbers are actually conservative especially as (mentioned earlier) they’re based on 2021 market capitalization rather than “projected” 2030 market caps.
What do you think of these predictions? Ambitious? Conservative?
Tell me in the comments! Looking forward to hearing your thoughts :)
Doctor Crypto Loves You To Bits