The bitcoin and crypto price bull run has stalled after its phenomenal rally in the first half of this year—with some issuing stark warnings over bitcoin’s prospects.
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The bitcoin price has failed to hold ground over $50,000 per bitcoin despite multiple attempts to pass the psychological barrier. Meanwhile, ethereum, the second-largest cryptocurrency after bitcoin, has also fallen away from its all-time high set in May.
Despite bitcoin’s recent struggles, Cathie Wood, the chief executive of Ark Invest who’s made a name for herself with big bets on bitcoin and Elon Musk’s electric car company Tesla
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“If we’re right and companies continue to diversify their cash into something like bitcoin, and institutional investors start allocating 5% of their funds, we believe that the price will be ten-fold of where it is today,” said Wood, speaking to CNBC anchor Andrew Ross Sorkin at the Salt technology conference in New York. “So instead of $45,000, over $500,000.”
In July, Wood joined Musk and Twitter’s Jack Dorsey in a live discussion that saw the trio discuss bitcoin’s potential as well as the merits of ethereum and the meme-based dogecoin.
Wood, who said she made price targets on a five-year timeline, named bitcoin as her top cryptocurrency as “countries are now deeming [bitcoin] legal tender,” although she’s also bullish on the ethereum price and sees the Ark portfolio split 60%, 40% between the two.
Earlier this month, El Salvador made history when it adopted bitcoin as its official currency alongside the U.S. dollar, sparking speculation other countries could follow suit. Some have suggested Ukraine could eventually adopt bitcoin after it moved to legalize it last week and a former prime minister of Malaysia has said his country should “encourage” crypto holders to invest in Malaysia.
Much of this year’s crypto price surge—that’s seen the combined crypto market soar from around $700 billion to over $2.1 trillion—is due to rallies in ethereum and its many rivals that are jostling for market share.
“[Ethereum] is seeing an explosion in developer activity thanks to NFTs and DeFi,” Wood said, referring to the digital collectible non-fungible token craze and an explosion in crypto-based decentralized finance—designed to recreate lending and interest without the need for banks.
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“I’m fascinated with what’s going on in DeFi, which is collapsing the cost of the infrastructure for financial services in a way that I know that the traditional financial industry does not appreciate right now,” said Wood. “Our confidence in ethereum has gone up dramatically as we’ve seen the beginning of this transition from proof-of-work to proof-of-stake.”
Late last year, ethereum began a long-awaited transition away from the energy-intensive proof-of-work to proof-of-stake, designed to help ethereum scale and increase its efficiency. The upgrade won’t be completed until 2022, however.
Wood, who sees the already sky-high valuation of Elon Musk’s Tesla soaring in coming years, praised the dogecoin-loving billionaire. “[Musk is] a visionary and he sees the future so clearly,” she said, predicting “explosive growth” and committing Ark to “nothing else but disruptive innovation.”
“I do believe that both crypto and the equity markets are going to be powered by millennials,” Wood added.