Crypto
1 Top Cryptocurrency to Buy Before It Soars 6,200%, According to Cathie Wood of Ark Invest
Ark Invest’s Cathie Wood has made a name for herself as a bit of a financial maverick. She seems to like going against the grain and is unafraid of making bets — and sticking to them — that others might shy away from. For example, even with all of its recent woes, Wood is unapologetic in her backing of Tesla. Beyond these bold bets, however, are her often-bolder public predictions.
Chief among these is her belief that Bitcoin (CRYPTO: BTC) will continue to rise in price to levels that most crypto investors can only dream of. Wood is a huge proponent of Bitcoin and crypto more generally and was one of the more influential figures in getting spot Bitcoin exchange-traded funds (ETFs) approved by the Securities and Exchange Commission. During that process, she stated that her company believed Bitcoin could be worth as much as $1.5 million by the end of the decade (her base case target was $600,000, still not a bad return).
However, more recently, she has said she believes the upper target could be as high as $3.8 million by 2030. That’s a roughly 6,200% return from today’s price and represents a more than 100% annual return.
Wood’s reasoning relies on a critical component that, while possible, just isn’t likely
Let’s first make something clear. Wood was not necessarily saying she expects Bitcoin to reach $3.8 million, but rather that it is possible. Her reasoning is institutional money flooded the market after the approval of Bitcoin ETFs and that if institutional investors were to put an average of 5% of their collective portfolios into the cryptocurrency it could reach that high. This is a huge “if.”
It’s hard to put an exact number on the state of the market now, but a 2023 report from Ernst & Young states that 55% of institutional investors with more than $500 billion in assets — where the lion’s share of total assets are concentrated — say they had less than 1% allocated to “digital assets.” Sixteen percent say they had less than 0.1%. Most funds prefer traditional equities and fixed-income investments. Only roughly 7% of total managed assets are in “alternative investments,” which includes a broad array of assets, from farm land to private equity to crypto. To have a total average of 5% in just Bitcoin by 2030 is a stretch at best.
Still, it’s worth noting investors are increasingly allocating money toward Bitcoin. In fact, 12% of respondents in the same category said they had more than 5% allocated and 25% of managers of all sizes have more than 5%. The vast majority of respondents expect to raise their investments in the future as well. This additional institutional capital will add a lot of value to the Bitcoin market.
Temper your expectations and remember to think about conflicts of interest
Wood is betting big on Bitcoin. She is personally invested in it and her firm’s revenue is, in part, tied to the size of the firm’s spot Bitcoin ETF. She has a vested interest in getting people excited about the returns they could achieve by investing in Bitcoin.
I do agree with her more generally though. Bitcoin will appreciate in value and, in my opinion, at a rate that exceeds traditional equities, just not as fast as she is implying. I think Bitcoin has proven it’s here to stay at this point. We’ve likely seen the last of Bitcoin losing half its value in a day or two. However, gone also are the days when you could buy $1,000 worth and become a millionaire a few years later. Sorry — you would have had to buy in sometime before 2014. Today, you should think of Bitcoin as much more like a traditional asset.
It’s still relatively new though. There is a lot of capital on the sidelines still waiting it out or at least just dipping a toe in. The more risk-tolerant institutions have already forged a path for the industry. I think more risk-averse players like pension funds and endowments will start getting in.
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1 Top Cryptocurrency to Buy Before It Soars 6,200%, According to Cathie Wood of Ark Invest was originally published by The Motley Fool
The largest token changed hands at US$96,200 as of 2pm Friday in Hong Kong, partly paring a retreat of almost 3 per cent from a day earlier. Smaller rivals including ether and dogecoin, a favourite of the meme crowd, oscillated in tight ranges.
The crypto market is also braced for the expiry of a substantial quantity of bitcoin and ether options contracts on Friday – one of the biggest such events in the history of digital assets, according to prime broker FalconX.
The notional value of the bitcoin contracts on the Deribit exchange – one of the largest for digital-asset derivatives – exceeds US$14 billion, while the equivalent figure for ether is about US$3.8 billion.
Sean McNulty, director of trading at liquidity provider Arbelos Markets, flagged the risk of a “choppy market” amid the expiry of the derivatives positions.
Russian businesses are reportedly using bitcoin and other cryptocurrencies to make international payments.
It’s a trend that comes in the wake of legislative changes that permitted these types of payments to get around western sanctions, Reuters reported Tuesday (Dec. 26), citing comments from Russian Finance Minister Anton Siluanov.
As the report noted, the sanctions — issued following Russia’s invasion of Ukraine in 2022 — have made it tougher for Russia to trade with partners like China and Turkey. But this year, Russia began allowing crypto for foreign trades, and is working on legalizing the mining of crypto such as bitcoin.
“As part of the experimental regime, it is possible to use bitcoins, which we had mined here in Russia (in foreign trade transactions),” Siluanov told Russia 24 television channel.
“Such transactions are already occurring. We believe they should be expanded and developed further. I am confident this will happen next year,” he said, adding that using digital currencies to make international payments represent the future.
PYMNTS explored this idea earlier this week in a report on events in the cryptocurrency/blockchain world in the past year.
“Cross-border payments, historically plagued by high fees and slow transaction times, underwent a significant transformation in 2024,” that report said. “Blockchain technology emerged as a key enabler, offering transparency, speed and cost efficiency.”
Stablecoins play a key role, PYMNTS added, letting businesses bypass traditional correspondent banking networks and settle transactions almost instantly.
“Blockchain technology and public blockchains in particular, are opening up a number of new use cases, one of which is to transfer value — such as remittances — from one country to another,” Raj Dhamodharan, executive vice president, blockchain and digital assets at Mastercard, told PYMNTS.
Research by PYMNTS Intelligence has found that cryptocurrency use in making cross-border payments could be the winning use case that the sector has been searching for. The research shows that blockchain-based cross-border solutions, especially stablecoins, are being increasingly used by firms looking for better ways to transact and expand internationally.
“Blockchain solutions and stablecoins — I don’t like to use the term crypto because this is more about FinTech — they’ve found product-market fit in cross-border payments,” Sheraz Shere, general manager of payments and commerce at Solana Foundation, said in an interview here earlier this year. “You get the disintermediation, you get the speed, you get the transparency, you get extremely low cost.”
Crypto
Markets Show Resilience Ahead of End-of-Year Options Expirations: Bybit x Block Scholes Crypto Derivatives Report
DUBAI, UAE, Dec. 26, 2024 /PRNewswire/ — Bybit, the world’s second-largest cryptocurrency exchange by trading volume, released the latest Crypto Derivatives Analytics Report in collaboration with Block Scholes, highlighting the muted market volatility despite major options expirations on Friday. BTC and ETH’s realized volatility has increased, but short-term options haven’t adjusted to this change. This indicates that while spot prices are fluctuating, the options market is not fully reacting to these shifts, although BTC and ETH volumes have displayed slightly different patterns.
Sources: Bybit, Block Scholes
With more than $525 million in BTC and ETH options contracts expiring on Dec 27, 2024’s end-of-year options expiration looks set to be one of the biggest yet, yet expectations for volatility have remained subdued. The report highlights an unusual inversion in ETH’s volatility structure, but BTC has not mirrored the reaction. Additionally, a change in funding rates—sometimes turning negative as spot prices drop—signals a new market phase. Notably, BTC’s volatility structure has been less responsive to changes in spot prices, whereas ETH’s short-term options are exhibiting more noticeable fluctuations.
Key Findings:
BTC Options Expirations:
In the past month, BTC’s realized volatility has been higher than implied volatility on three occasions, each time reaching a relatively calm equilibrium. Open interest in BTC options remains high, contributing to potential increased volatility as we near the end of the year. Around $360 million worth of BTC options (both puts and calls) are set to expire soon, which can affect price movement.
ETH Options: Calls Dominate
Despite a mid-week inversion, ETH’s volatility term structure has flattened, maintaining levels similar to those seen over the past month. In the final week of 2024, calls overwhelmed puts in open interest in ETH options, although market movements and trading activities are more on the put side.
Access the Full Report:
Gain deeper insights and explore the potential impacts on your crypto trading strategies by downloading the full report here: Bybit X Block Scholes Crypto Derivatives Analytics Report (Dec 24, 2024)
#Bybit / #BybitResearch
About Bybit
Bybit is the world’s second-largest cryptocurrency exchange by trading volume, serving a global community of over 60 million users. Founded in 2018, Bybit is redefining openness in the decentralized world by creating a simpler, open and equal ecosystem for everyone. With a strong focus on Web3, Bybit partners strategically with leading blockchain protocols to provide robust infrastructure and drive on-chain innovation. Renowned for its secure custody, diverse marketplaces, intuitive user experience, and advanced blockchain tools, Bybit bridges the gap between TradFi and DeFi, empowering builders, creators, and enthusiasts to unlock the full potential of Web3. Discover the future of decentralized finance at Bybit.com.
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