Even though innovation in decentralized finance (DeFi) is now attracting the most attention, investment company ARK InvestManagement from New York claims that Bitcoin (BTC) is “the most attractive monetary asset since the time of gold”, capable of reaching a market capitalization of $ 1-5 trillion in the next five to ten years.
In its new report, the company, in collaboration with research firm Coin Metrics, views BTC as an emerging financial asset with a bullish future price outlook.
The document states that market capitalizationbitcoin is able to grow significantly from the current level of more than $ 200 billion, provided that the asset is widely used for the following purposes:
- Global settlement network;
- Protection against confiscation of assets;
- Digital gold shape;
- A catalyst for currency demonetization in emerging markets.
If any of these scenarios are realized, ARK believes that Bitcoin's market capitalization will grow "by an order of magnitude or more" over the next decade, reaching $ 3 trillion by 2025.
Bitcoin Opportunity Assessment:
The hypothetical value of bitcoin as a payment network:
The hypothetical value of bitcoin as a confiscation-protected asset:
The hypothetical value of bitcoin as digital gold:
The hypothetical value of bitcoin as a catalyst for currency demonetization:
In addition, the company is of the opinion thatbitcoin “appears to be the only asset with consistently low correlations compared to traditional asset classes,” which provides strong diversification benefits for traditional investors.
“Most of the correlation is inrange from -0.2 to 0.2, the report says, which also notes that the volatility seen in the markets at the beginning of the COVID-19 pandemic earlier this year was an exception.
However, the document indicates severalrisk factors for companies and individuals wishing to access bitcoins. These include the secure storage of bitcoin, regulatory uncertainty, and increased scrutiny from financial institutions seeking to restrict the free exchange of digital currency on the network.