The price of Bitcoin is trading just below $103,000 after falling 16% over the past month, and even the market’s most optimistic believers dampens expectations.
ARK Invest CEO Cathie Wood, known for her bold predictions for Bitcoinsaid during an interview on CNBC’s Squawk Box that she has revised her bullish Bitcoin price target down by $300,000, citing rapid increase of stablecoins as the main reason for the adjustment.
Stablecoins take over part of Bitcoin’s role
Wood explained it stablecoins fulfill a function that she and her team initially thought Bitcoin would dominate, i.e. serving as a financial tool for emerging economies. She noted that stablecoins have become the digital assets of choice in many markets. According to her, this trend has expanded much faster than anyone expected, leading ARK Invest to reduce its long-term bullish forecast for Bitcoin by $300,000. This lowers the Bitcoin forecast from $1.5 million in 2030 to around $1.2 million.
Wood said the company’s models now recognize that stablecoins are scaling faster than expected. In her words, “stablecoins here are scaling much faster than anyone else,” and their growth is effectively taking a portion of the market that Bitcoin was once expected to take.
Gold, institutions and the bigger picture
When asked if gold is factored into her forecast, Wood explained that the $300,000 drop assumes all else being equal, gold continues to grow as it is.
But since gold has also doubled in value since ARK Invest’s initial Bitcoin forecast, the comparison has become more nuanced. She reiterated that Bitcoin’s investment case remains intact because it is both digital gold and a technological innovation that forms the basis of a global monetary system.
Wood noted that Bitcoin is “leading a new asset class” while distinguishing stablecoins as digital cash equivalents. The relationship between gold, stablecoins and Bitcoin represents what she described as a dynamic interplay of “puts and takes”. Although she trimmed her price forecast, Wood emphasized that ARK is fundamentally bullish on Bitcoin’s long-term potential.
Even as ARK Invest tempers expectations, Wood emphasized that institutional interest in Bitcoin and blockchain-based payment systems is still in its early stages. She noted that major financial players are just beginning to test the waters, with early experiments in new payment rails and digital asset integration just beginning to take shape.
For Wood, this early stage of institutional commitment is the first of a long trajectory for Bitcoin’s growth. Despite the current short-term market weakness and competition from stablecoins, she also maintained her faith in Bitcoin’s technological role as a leader in a new asset class.
“We’re just getting started,” she said, adding that there’s still “a long way to go.”
At the time of writing, Bitcoin is trading at $102,413, up 1% over the past 24 hours but down 7% and 16% over the past seven and 30 days respectively.
Featured image from Unsplash, chart from TradingView
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