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“The American economy should collapse”
Kevin O’Leary Responds to Cathie Wood’s Bitcoin Prediction: ‘The US Economy Should Collapse’
Cathie Wood, CEO of asset management firm Ark Invest, is known for making outlandish projections about the future of cryptocurrencies. While these predictions would make any investor in the tokens much richer, there are some very strong assumptions behind the predictions that have a very low probability of actually occurring.
Wood has made several predictions about Bitcoin, each time raising the price target. Earlier in the year, Wood noted that Ark’s “base case” for Bitcoin would be $600,000. However, this prediction has been bumped up to $3.8 million by 2030:
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“Last year we made our bull case for Bitcoin. It was $1.5 million. With this institutional green light that the SEC provided, kicking and screaming even though it did, the analysis we did is that if institutional investors were to allocate just over 5% of their portfolios to Bitcoin, as we think they will over time, that alone would add $2.3 million to the projection that I just gave you,” Wood said.
According to Kevin O’Leary, entrepreneur and “Shark Tank” host, “in my opinion this kind of appreciation would mean that the American economy has collapsed. So it’s not good speculation.”
O’Leary goes on to say that many see Bitcoin as a hedge against economic downturns and that he owns “a weight of it for that reason.” This is largely due to the fact that Bitcoin has a predictable supply that allows the price to be controlled almost exclusively by demand, while central bank currencies can be manipulated by human interference.
However, O’Leary does not believe that the world or US economy will collapse anytime soon, which, by his logic, would make it nearly impossible for Bitcoin to reach Wood’s price target.
One caveat to O’Leary’s point is that Wood’s prediction is based on institutional investment. Wood and Ark believe that high levels of institutional involvement with Bitcoin could push the price higher. While this could happen, the likelihood of institutions investing “just over 5% of their portfolios in Bitcoin” is close to zero.
While a global economic collapse or a huge level of institutional investment could potentially push Bitcoin to new heights, these events are very unlikely to occur. Furthermore, it is important to note that Wood has a vested interest in promoting Bitcoin and making the future look very bright. In January 2024, Ark was one of several firms that released a spot Bitcoin ETF. If Wood can get investors excited about Bitcoin through his predictions, it could influence investors to start trading Bitcoin ETFs and, more specifically, Ark ETFs.
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This article Kevin O’Leary Responds to Cathie Wood’s Bitcoin Prediction: ‘The US Economy Should Collapse’ originally appeared on Benzinga.com
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