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Bitcoin Will Rise to Over $1 Trillion In Next Ten Years, Tesla Investor’s BTC Value Prediction

Bitcoin has had a rollercoaster year amid the COVID-19 pandemic market disruption but has ultimately persevered adding over 40% to its price and now exceeds $200 billion in market capitalization.

The Bitcoin price sat at around $7,000 per Bitcoin token at the beginning of 2020, before crashing to under $4,000 on Black Thursday in March. The Bitcoin price has since rebounded to and sits at around $10,700 per coin at the time of writing.

This year, there has been a marked increase of institutional interest in Bitcoin and maturity in the cryptocurrency market, particularly on Bitcoin’s status as a store of wealth in a time of economic uncertainty.

A prominent investor who correctly predicted the exponential growth of Tesla this year, has now reported that they expect Bitcoin’s market capitalization to exceed $1 trillion and could go as high as $5 trillion during over the course of the next decade.

As reported by Forbes on Oct 4, Ark Invest’s Director of Research Yassine Elmandjra recently released a report to persuade investor’s to stop ignoring Bitcoin’s potential as an asset.

Elmandjra wrote:

“Bitcoin offers one of the most compelling risk-reward profiles among assets, as our analysis suggests it should scale from roughly $200 billion today to $1-5 trillion network capitalization during the next five to ten years.”

Ark Invest previously correctly guided its investors towards investment in electric-car and tech development firm Tesla, a company whose price has increased over 400% this year alone, despite the market disruptions.

Bitcoin: The Last Decade and Beyond

Ark reportedly remains exceptionally optimistic on the Bitcoin price in the decade to come, and it only takes a short look back over the last decade to understand this sentiment.

Bitcoin is by far the highest performing asset of the last ten years, its price increasing from less than a dollar to it all-time-high of $20,000 per Bitcoin token by the end of 2017 before a slight implosion of the crypto market, largely due to bad actors and a run of cash-grabbing initial coin offerings as the crypto market was center stage at this time.

Elmandjra wrote in the Ark report:

“Our analysis suggests Bitcoin is early on its path to monetization, with substantial appreciation potential […] In our view, bitcoin’s $200 billion market capitalization—or network value—will scale more than an order of magnitude to the trillions during the next decade.”

Elmandrja also warned that a number of risks still exist that could completely derail Bitcoin’s coming bull run. While the institutional investment into Bitcoin is encouraging for crypto investors, the analyst says over-institutionalization could destroy Bitcoin’s value proposition and could see a “few trusted parties dominating transactions.”

MicroStrategy acquires $425M worth of BTC

The Chief Executive Officer of the multibillion-dollar business intelligence firm MicroStrategy recently discussed the subject of Bitcoin (BTC), gold, and alternative asset classes. He explained that with the Federal Reserve’s plans to continue pushing inflation above 2%, he felt as if MicroStrategy’s investments were sitting on “a $500 million melting ice cube,” with the depreciation of the US dollar.

This drove him to secure MicroStrategy’s treasury reserve by purchasing $425 million worth of Bitcoin. The bold move made headlines everywhere as MicroStrategy is the first public company to invest most of its reserve monetary supply in BTC.

Bitcoin Price Not Everything Says Bitfinex CTO, as BTC moves Sideways

The Bitcoin price has stagnated, trending sideways between $32,000 and $34,000—but recognizing BTC’s true value is not all about the price of the crypto says Bitfinex CTO Paolo Ardoino.

Financial markets are still trying to cope with the trend of coordinated buying attacks of r/Wallstreetbets, which has spread into the cryptocurrency markets with subreddits like r/Satoshistreetbets and Telegram Groups that helped initiate the pumps and dumps of Dogecoin (DOGE) and Ripple’s XRP.

With the markets being driven by a profit-driving frenzy, there has even been chatter about a coordinated buying attack on Bitcoin, with some interesting data revealing hedge funds have been shorting Bitcoin and one of the most well-known online Bitcoin communities passed two million subscribers in a surge of activity on Friday.

However, as CTO of Bitfinex Paolo Ardoino said in a note to Blockchain.News last week, it’s not about the price of Bitcoin it is about the underlying technology that could create further democratization of the markets, an underlying narrative of the WSB squeeze on GameStop shares. Ardoino said:

“An increasing recognition of Bitcoin’s distinctive traits should outlast the current GameStop interest. While nascent, cryptocurrencies have the potential to invert the power structure of inequitable financial markets that are weighted against retail investors.”

The Bitcoin price surged to $38,000 over the weekend, following Tesla founder and CEO Elon Musk giving the cryptocurrency his endorsement. It has since returned to the $32,000 to $34,000 range and continues to move sideways. But more exciting to Ardoino is the recognition that Bitcoin is now seeing from figures such as Musk and institutions. In a new note today Ardoino commented:

“Bitcoin’s recognition as a ‘good thing’ has always seemingly been judged according to its price. Yet amid more feverish speculation in frothy markets, it is important to remember the underlying vision behind the king of crypto. Bitcoin is the base layer of an emerging alternative financial system. The discontent that has erupted as the r/WallStreetBets Reddit group does battle with citadels may well add further fuel to bitcoin’s ascent.”

Will Bitcoin Price Breakout Soon?

Despite the sideways price action, Ki Young Ju, the CEO of the cryptocurrency analysis firm CryptoQuant, identified a potential bullish indicator yesterday that may be signaling a BTC price breakout in the crypto’s near future.

According to the CryptoQuant CEO, more than 15,000 Bitcoin were recently withdrawn from Coinbase Pro with the outflows going “into custody wallets”—this indicates that OTC deals from institutional investors are likely occurring. Bitcoin price rallies have followed similar outflows in the past, and Ju sees this as a sign BTC will at least be able to “protect $33,000 in the short-term.”

The influx of institutional and corporate buyers into Bitcoin has added to the strong hands that currently make up the market. Industry data has consistently shown that more than 60% of BTC’s circulating supply is being held for the long-term.

It appears Bitcoin is headed in the right direction as the market matures and the nascent digital asset continues to gain support among S&P 500 companies. Ark Invest said in its latest Big Ideas report, that Bitcoin’s price is supported by “robust network fundamentals, ” and further stated the BTC price would increase by roughly $40,000 if “all S&P 500 companies were to allocate 1% of their cash” to BTC.

The scenario may seem a long way away, but it is becoming more and more realistic as institutional capital continues to be injected into the BTC network.

The Bitcoin price continues moving sideways and BTC is trading at $33,638.08 according to CoinMarketCap.

Silvergate Loses Additional Ratings From Moody's

Things at Silvergate Bank seem to be going from bad to worse after receiving a downgrade to its rating from Moody’s and having ARK Invest give up part of its shares in the bank. The bank has already been attacked by customers in a run, and its demise has been connected to that of FTX.

Cathy Wood’s investment vehicle, ARK Invest, reportedly sold more than 400,000 shares of its parent company, Silvergate Capital, on January 6, for a total value of $4.3 million. After the transaction, ARK Invest was left with just 4,000 shares of the company’s stock. This information comes from a number of stories that were published in the media.

During the course of the previous day, the value of those shares saw a decrease that was equivalent to 43 percent.

Moody’s Investors Service has also taken action in reaction to the problem at the bank, downgrading its ratings of both Silvergate Capital and the bank as a result of the situation.

Both the long-term deposit rating of the bank and the long-term issuer rating of the bank were downgraded, with a negative outlook for both entities. The long-term deposit rating of the bank was downgraded from Baa2 (“lower-medium grade”) to Ba1 (“junk”), and the long-term issuer rating of the bank was also downgraded from Ba2 (“junk”) to B1 (“junk”).

The key elements that lead Moody’s to reach their judgment were the decline in deposits, the losses that were suffered by selling securities to fulfill liquidity needs, and the layoffs that occurred.

As a consequence of liquidating debt in order to return $8.1 billion in withdrawals, Silvergate Bank reportedly sustained a loss of $718 million on January 5th, according to sources. This loss was due to the fact that the bank had to pay back the money.

In addition to that, they terminated the employment of around two hundred workers, which is equivalent to forty percent of their whole workforce.

FTX investors have complained about the same issues in a class-action complaint against Lane, the bank, and Silvergate Capital, which was filed on December 16th.

Ark Invest continues to buy Coinbase shares

Despite the most recent decrease in the price of cryptocurrencies, the investment management business owned and operated by Cathie Wood, Ark Invest, continues to accumulate Coinbase (COIN) shares.

Ark made its first COIN acquisitions since the middle of January on February 10 and February 13, gaining substantial exposure to the most prominent cryptocurrency exchange in the United States.

The ARKK and ARKW funds of Ark resumed their accumulation of Coinbase stock on February 13, adding 102,281 and 16,414 COIN shares, respectively, to their holdings of the company’s equity. Given that COIN finished trading at $56.4 on Monday, the total cost of Ark’s acquisitions was around $6.7 million.

Ark invested approximately $16 million in Coinbase stock during the course of only two days, which is $3.5 million more than the entire amount it had held in COIN shares for the month of January. As of the 14th of February, Ark has purchased a total of 280,000 COIN shares on a monthly basis; however, during the month of January, Ark purchased more than 330,000 COIN shares.

The total number of COIN shares that Ark has acquired so far in 2023 is 614,657, and they were purchased for a total of $28.8 million.

The most recent acquisitions came as CEO and chief investment officer of Ark Invest, Wood, continues to have a strong stance on the cryptocurrency industry.

On February 3, 2019, Wood reaffirmed her positive position on Bitcoin (BTC), stating that she believes the cryptocurrency would reach $1 million by the year 2030. Due to the robust nature of its network, the investing expert is of the opinion that Bitcoin should be used as an insurance policy for nations that are struggling with inflation.

Inflation and the possibility of a Fed policy shift are two factors that the chief executive officer of The Ark thinks will lead to a significant market shift in 2023.