Analysts predict Bitcoin price will surge
Ark Invest analyst Yassine Elmandjra is one of those who offers dizzying predictions.
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“This is by far the strongest signal we have seen around financial institutions seeing cryptocurrencies as a new asset class, and Wall Street is finally here to make the leap,” Elmandjra said in a webinar yesterday. “We believe a partnership of this magnitude could lead to trillions of dollars into the crypto asset class over the next few years.”
He then shared the findings from his analysis of ARK.
based on the return of Bitcoin Over the past decade, ARK has determined that a well-diversified portfolio should include between 2.5% and 6.5% based on investors’ risk tolerance. I’m not sure how they came to this analysis (I’d love to see the numbers!), but it seems like a reasonable statement, albeit a very general one.
There are certainly investors for whom Bitcoin is not a good fit (short-term investors, investors who already hold correlated products, etc.) and conversely there are those who can tolerate allocations above 6.5%.
Second, basing future allocation recommendations on Bitcoin’s past performance is flawed. Not only is the classic “past performance not indicative of future returns” true, but Bitcoin carries even more weight.
Tell me – What are the exact conclusions from the Bitcoin price movement from 2012 to 2015 that will help you get the perfect allocation to Bitcoin going forward? It was a time when it lived in a corner, largely undiscovered by the mainstream media, and had yet to launch its assault on the traditional world of finance.From a macro perspective, this price data was essentially Totally irrelevant.
However, Elmandjra concludes that based on ARK’s recommended allocation of 2.5% to 6.5% (as it was calculated), Bitcoin could surge by $200,000 and $500,000 respectively. is where all those sexy headlines “Bitcoin Hits $600K, According To ARK” came out.
Will Bitcoin Reach $600,000?
Hmm… I don’t know. But this analysis is fingertips at best. Not all Blackrock clients invest in Bitcoin, so we pour 2.5% to 6.5% of our AUM into the Bitcoin market cap. I’m all for taking cheeky shortcuts to models here and there, but come on.
But this is huge news for Bitcoin as a whole, and it seems incontrovertible. Signal. This is a remarkable sign of institutional adoption that would have been a distant dream a few years ago.
What is interesting is the price reaction of Bitcoin. It climbed steadily, but not spectacularly in the news, up about 4%. Contrast this with Tesla’s announcement that the automaker had bitcoin on its balance sheet in the first quarter of last year when bitcoin jumped his 15%.
Blackrock is the world’s largest institutional money manager, and this announcement means that its customers will be able to buy Bitcoin. coin base investors do this stock Distraught stocks don’t look so distraught after a 75% gain on the news.
I’m not very good at explaining what this means in terms of numbers, so you won’t see the headline “Bitcoin hits $1 million”. Elmandjra’s analysis is flawed for many reasons. Adding another reason, when Blackrock’s clients pour into bitcoin, it will likely create a domino effect for other institutional investors, causing more money to flow in. Blackrock is simply suddenly loaded with orange coins in isolation, with the rest of the market waiting in vain.
Well, this is very big news for Bitcoin bulls. But the figure of Bitcoin going to $500,000? No – it’s a really random statement.
But hey, if anyone is keeping in touch with Elmanjura, I’d love to dig into the numbers properly.
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