ARK Invest, led by Cathie Wood, remains optimistic on Bitcoin as its price approaches a record $111,814. Their May report highlights several bullish factors supporting the cryptocurrency’s upward momentum.
- Bitcoin’s aggregate unrealized profits are one standard deviation above the mean this cycle, far from the three standard deviations that typically indicate market excess.
- Bitcoin ETFs have seen a 120% increase in inflows, rising from $2.5 billion to $5.5 billion, contrasting with a sharp decline in global gold ETF assets.
- Key support levels have risen to between $94,000 and $97,000, surpassing Bitcoin’s 200-day moving average and short-term holder cost basis.
Despite these positive signs, ARK notes some bearish trends, including declining transaction volumes and a significant drop in Bitcoin Core development activity to its lowest since 2013. The report interprets this as Bitcoin’s shift toward a fixed monetary asset with less dynamic development.
Macro conditions present a mixed outlook, with an increase in U.S. home sellers suggesting market caution. Rising supply costs and falling auto sales add neutral signals to the economic environment.
Undeterred by near-term uncertainties, ARK continues to forecast strong long-term growth for Bitcoin. In early 2024, Wood projected Bitcoin could reach $1 million per coin, challenging demand for gold. More recently, ARK’s experimental modeling anticipates Bitcoin could hit $2.4 million by 2030, accounting for active circulating supply. Their bearish forecast still values Bitcoin at $500,000 by 2030, about five times its current price.
Bitcoin was trading near $109,360 at the time of the report, just 2% below its all-time high.