|
|
|
|
|||||
|
|
|
Cryptocurrency values are determined by supply and demand.
Demand for this cryptocurrency is set to explode during the next five years for two main reasons.
Limited supply growth and lots of holders could push the price even higher.
Investing in cryptocurrency typically comes with a lot of ups and downs. But if you're able to stomach the volatility, you could make some incredible profits.
Bitcoin (CRYPTO: BTC), for example, has seen its value increase roughly 1,600% since the start of 2020. But that includes plunges of 25% or more on five separate occasions. The cryptocurrency lost more than half its value in 2021 before recovering to a new all-time high, just to lose more than three-quarters of its value in 2022.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
While Bitcoin currently sits near its all-time high once again, Cathie Wood's Ark Invest thinks it can keep climbing higher during the next 5 1/2 years. She and her team put a price target of $2.4 million on Bitcoin, according to the analysts' bull case for the cryptocurrency. That represents upside of more than 1,900%.
Although it's likely to be a erratic climb, here's what could push Bitcoin to that level.
Image source: Getty Images.
Ark Invest's analysis lays out several contributors toward the rise in the value of Bitcoin. Two of them account for about 80% of its price target: institutional investment and the asset's growing acceptance as a store of value.
When it comes to institutional investment, Ark Invest sees the total addressable market climbing to $200 trillion by 2030. That assumes 3% growth from the $169 trillion in assets held by institutional investors at the end of 2024 (excluding gold). For its bull case, the analysts anticipate institutional investors allocating 6.5% of their assets to Bitcoin.
That's certainly a significant allocation. Gold currently accounts for about 3.6% of assets held by institutions, according to the analysts. So, investors would have to move all of their gold into Bitcoin and then some in order to meet Ark's bull case. Its base case (price target of $1.2 million) calls for just 2.5% allocated to Bitcoin, which may be a more reasonable assumption for the long term (although it might not happen by 2030).
Institutions are likely to accelerate their adoption of Bitcoin during the next few years. With Bitcoin exchange-traded funds (ETFs) now readily available for investors, it's a lot easier for institutions to buy and sell the asset. Moreover, the current administration in Washington is relaxing regulations around cryptocurrency and providing more clarity for investors. That should give big institutions more confidence in holding the cryptocurrency.
Additionally, we're seeing growing adoption of the Bitcoin treasury model made popular by MicroStrategy. MicroStrategy, now doing business as Strategy, has bought $72 billion worth of Bitcoin as of this writing and continues to add billions of dollars of the crypto to its balance sheet every month. Ark's analysts still think corporations will only put about $700 billion into Bitcoin even in the most bullish scenario.
The other factor driving Bitcoin's price higher during the next few years is the growing adoption of the asset as digital gold. The analysts see Bitcoin as a hedge against inflation. Considering the stubbornness of inflation right now and the potential for prices to increase with new tariffs going into effect, that could drive adoption of Bitcoin among consumers. Ark's analysts see gold's current market capitalization, about $18 trillion, as the potential market for Bitcoin as a gold alternative. In its bull case, it sees Bitcoin capturing 60% of the market, or nearly $11 trillion.
Supply and demand are the only two driving forces behind the price of Bitcoin. The above factors describe how demand for Bitcoin could climb significantly higher during the next few years. But Bitcoin's supply grows at a fixed rate every time a new block gets validated on the blockchain.
However, Ark's analysts point out that not every Bitcoin is really available for buying and selling. For example, the wallet of Bitcoin's anonymous creator, Satoshi Nakamoto, has sat idle since 2010 with 1.1 million Bitcoin in it. There are countless other wallets that haven't been active in years, either because the owners of those wallets are holding on forever or because they're inaccessible because the owners lost or forget their access keys. Ark's analysts estimate only about 60% of the Bitcoin already mined is in the active supply.
When you apply that ratio to the growing demand for Bitcoin during the next few years, it results in significantly higher price targets. In Ark's bull case, that's $2.4 million, but even in the bear case, it expects the asset to climb to $500,000 due to the impact of limited active supply.
Nearly 95% of Bitcoins 21 million coins have already been mined. The supply isn't going to grow significantly unless a dormant wallet unexpectedly decides to sell into the market, weighing on the price. But the long-term trend points to a continued increase in the value of Bitcoin. It might not reach Ark's bull case of $2.4 million per coin, but it's reasonable to expect the price of Bitcoin to keep climbing. As long as you can endure the inevitable volatility, it's worth holding some in your portfolio.
Before you buy stock in Bitcoin, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,083,392!*
Now, it’s worth noting Stock Advisor’s total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
*Stock Advisor returns as of July 29, 2025
Adam Levy has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
| Jul-30 | |
| Jul-30 | |
| Jul-30 | |
| Jul-30 | |
| Jul-30 | |
| Jul-30 | |
| Jul-30 | |
| Jul-28 | |
| Jul-28 | |
| Jul-28 | |
| Jul-28 | |
| Jul-27 | |
| Jul-26 | |
| Jul-26 | |
| Jul-26 |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, backtesting, and much more.
Learn more about FINVIZ*Elite