By
Mayowa Adebajo
May 14th, 2024
Bitcoin has failed to maintain a persuasive continuation of its recent bull-run price action but is able to move higher soon.
A new report by Ark Invest suggests that Bitcoin price could reach $535K. The report, titled “Bitcoin: Preparing for Institutions”, asserts that the digital asset could soar to such heights if corporate buyers invested 10% of their caches into Bitcoin.
Ark Invest Suggests that Institutional Bitcoin Allocations Could Exceed 1%
The report surmised that an allocation of as much as 1% from S&P 500 companies would be enough to drive an upswing of $40K in BTC/USD price spots. This report comes at a time when institutional investors are more inclined to use Bitcoin as a long-term substitute for cash and a hedge against inflation. To give an instance, on January 31, 15,200 BTC, currently worth over $500M was withdrawn from a Coinbase wallet and transferred into several custodial wallets.
CryptoQuant CEO Ki Young Ju believes that this transaction is, in itself, an indication of a bullish future as institutions are now preparing for a bull-break.
Ark Invest’s report notes that Bitcoin has gained more trust recently and that institutional BTC allocations would more likely be over 1% and possibly between 2.55% and 6.55%.
“Based on search volumes compared to 2017, bitcoin’s price increase seems to be driven less by hype. With bitcoin appearing to gain more trust, some companies are considering it as cash on their balance sheets. […] Based on daily returns across asset classes during the past 10 years, our analysis suggests that allocations to bitcoin should range from 2.55% when minimizing volatility to 6.55% when maximizing returns. Based on ARK’s simulated portfolio allocations, institutional allocations between 2.5% and 6.5% could impact bitcoin’s price by $200,000 to $500,000,” reads the report.
Mainstream Bullishness Continues
Bitcoin has, in recent weeks, failed to maintain a persuasive continuation of its recent bull-run price action. This, however, does not seem to deter investors. In fact, asset management firm Grayscale just might provide a much-needed jolt in the market.
In an interview, Michael Bucella, General Partner at Block Tower Capital said this about Grayscale:
“There is a large and emerging group of institutions that have an enormous capital base that are reallocating to this space. And if you think about the supply-demand model of a commodity, the supply curve is declining over time to effectively zero, and the demand is increasing exponentially.”
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