News
1 red hot cryptocurrency to buy now. It could rise from 525% to 5,800%, according to some Wall Street analysts.
Bitcoin (CRYPTO:BTC) has gained 116% over the past year amid a recovery in risk assets driven by an increasingly optimistic economic outlook. Other factors contributing to these returns include the recent approval of Bitcoin spot ETFs and the upcoming halving of Bitcoin mining rewards, scheduled for April 16, 2024.
Several Wall Street analysts believe these factors will push the cryptocurrency even higher in the future, but Anthony Scaramucci, Tom Lee and Cathie Wood are among the most bullish. Their forecasts imply an upside of 525% to 5,800% from the current price of $64,000.
The two catalysts that could push Bitcoin higher
Recently approved Spot Bitcoin ETF they offer direct exposure to Bitcoin without the friction of cryptocurrency exchanges. It could be a game changer. By allowing investors to consolidate accounts (i.e. no separate cryptocurrency accounts) and eliminating high transaction fees, spot Bitcoin ETFs could significantly increase demand.
Meanwhile, Bitcoin mining rewards will be reduced by 50% in April 2024. Halving events are encoded in the blockchain protocol to ensure that Bitcoin supply never exceeds 21 million and occur approximately once every four years. The result is that, by halving emissions, the event will leave miners with 50% less Bitcoin to sell over the next four years, thus decreasing selling pressure.
Anthony Scaramucci: $400,000 for Bitcoin (up 525%)
Anthony Scaramucci is the founder and managing partner of SkyBridge Capital, an alternative asset manager specializing in hedge funds, digital assets, private equity and real estate. Scaramucci was an early investor in the iShares Bitcoin ETF Of Black rockand he made some interesting comments during an interview with YouTube host Scott Melker earlier this year.
When asked about his prediction that Bitcoin could surpass $170,000 by 2025, Scaramucci called it a data-dependent estimate based on the fact that Bitcoin consistently quadrupled during the 18-month period following the halving events. Reuters cited a similar comment from Scaramucci ahead of the World Economic Forum meeting in January. “Whatever the price is on halving day in April, multiply it by four and it will reach that price in the next 18 months.”
Bitcoin is now worth $64,000, bringing Scaramucci’s 18-month forecast to $256,000. Interestingly, there is a precedent for large price increases during the 18 months following halving events.
|
November 28, 2012 |
$13 |
$572 |
4,300% |
|
July 9, 2016 |
$647 |
$14,919 |
2.205% |
|
May 11, 2020 |
$8,821 |
$65,061 |
638% |
Data source: StatMuse, YCharts. Note: Bitcoin prices have been rounded to the nearest dollar.
The story continues
Scaramucci also told Melker, “My long-term price goal is for Bitcoin to easily reach half the market cap of gold.” At the time, gold had a market cap of $14.5 trillion, so Bitcoin could eventually have a market cap of $7 to $8 trillion, according to Scaramucci. This would take the price to $400,000, implying an upside of 525%.
“It would be ridiculous – concluded Scaramucci – if people did not understand the asset, did not understand its dynamics as a store of value and did not have a position”.
Tom Lee: $500,000 for Bitcoin (up 681%)
Tom Lee is a managing partner and head of research at Fundstrat Global Advisors, a research firm that provides information to institutional investors, wealth advisors, pension funds, family offices and high-net-worth individuals. Previously, Lee served as chief equity strategist at JP Morgan Chase between 2007 and 2014.
Speaking on CNBC’s Squawk Box, Lee recently said that Bitcoin could reach $150,000 this year and $500,000 within five years. He pointed to several catalysts to explain his esteem for him. “Demand is improving with the [spot Bitcoin] ETFs, supply will reduce with the halving, and if monetary policy loosens, which we expect, you know it will be supportive of risky assets,” Lee said.
Lee is not alone in thinking that Bitcoin could reach $500,000 in the future, a prediction that implies a 681% upside from its current price. In 2022, MicroStrategy CEO Michael Saylor said the cryptocurrency could reach half a million in the next decade.
Cathie Wood: $3.8 million for Bitcoin (5,800% increase)
Cathie Wood is CEO and Chief Investment Officer of Ark Invest, an asset manager focused on disruptive innovation. Last year, Ark released a valuation model that valued Bitcoin close to $1.5 million by 2030. The firm updated its estimate following the approval of spot Bitcoin ETFs earlier this year. Wood shed light on the new outlook at last month’s Bitcoin Investor Day conference.
“The analysis we did is that if institutional investors were to allocate just over 5% of their portfolios to Bitcoin, as we think they will over time, that alone would add $2.3 million to the projection I just gave.” Wood said. In short, Ark believes Bitcoin could reach $3.8 million ($1.5 million plus $2.3 million) as institutions invest in the cryptocurrency, and the firm believes spot ETFs on Bitcoin will drive such investments. This estimate implies an increase of more than 5,800%.
Consulting firm PwC says institutional assets under management (AUM) will reach $145 trillion by 2025. Using that figure, Ark’s model suggests that spot Bitcoin ETFs will capture $8 trillion in institutional assets at a some point in the future. It might take a while. Spot Bitcoin ETFs have $56 billion in assets under management, but 90% of inflows come from retail investors. This leaves $6 billion in AUM attributable to institutions, so they would need to increase their Bitcoin allocation by 1,333x to reach Ark’s threshold.
Investors should focus on facts and not predictions
Anchoring yourself to forecasts is dangerous. There is absolutely no guarantee that Bitcoin will move one cent higher than the level it is currently trading at. However, Bitcoin has outperformed virtually every asset class over the past five years, and the catalysts I mentioned could certainly drive its price higher over the next five.
Indeed, the recent launch of Bitcoin spot ETFs has already been a huge success. According to Bloomberg’s Eric Balchunas, funds issued by BlackRock and Fidelity saw more inflows during their first month of trading than any other ETF in history. And according to the Wall Street Journal, BlackRock’s iShares Bitcoin ETF reached $10 billion in assets faster than any other ETF in history.
The point is this: Cryptocurrencies are volatile, and there is no guarantee that any of them will be worth more in the future. But I think patient investors who are comfortable with risk should allocate a percentage of their portfolios to Bitcoin. Ark Invest recently published a Sharpe Ratio analysis that suggests a 19.4% allocation was optimal last year, but I would limit exposure to 5%.
Should You Invest $1,000 in Bitcoin Right Now?
Before you buy Bitcoin stocks, consider this:
The analyst team at Motley Fool Stock Advisor has just identified what they believe is the 10 best stocks for investors to buy now… and Bitcoin was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia you created this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $526,933!*
Stock Advisor provides investors with an easy-to-follow model of success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks every month. The stock advisory service has more than quadrupled the return of the S&P 500 index since 2002*.
*Equity advisor will return starting April 15, 2024
Trevor Jennewine has no position in any of the securities mentioned. The Motley Fool has positions and recommends Bitcoin. The Motley Fool has a disclosure policy.
1 red hot cryptocurrency to buy now. It could rise from 525% to 5,800%, according to some Wall Street analysts. was originally published by The Motley Fool