According to Ark Invest, Bitcoin is on its way to being recognized as a new asset class. The investment company predicts that, with a strategic allocation of investments from institutional investors, the value of BTC could reach $2.3 million.
This marks a significant shift from a few years ago when institutional investors were hesitant to invest in BTC due to concerns about manipulation.
Now, they have a way to legally enter the digital asset market through exchange-traded crypto funds (ETFs) that invest in Bitcoin. The report highlights that institutional investors control a massive amount of capital, around $250 trillion.
If even a small portion of these funds were allocated to BTC, its value would skyrocket. Additionally, if institutions allocate 4.8% of their funds to BTC, its price would reach $550,000. If they allocate 19.4%, it would reach the predicted $2.3 million.
Compared to traditional assets, BTC has shown a return ratio of only 0.27 over the past five years. However, its annual profitability has been at an impressive 44%, while the average profit from investments in fixed assets is only 5.7%.