Bitcoin
‘The US economy would have to collapse’
Kevin O’Leary responds to Cathie Wood’s Bitcoin prediction: ‘The US economy would have to collapse’
Cathie Wood, CEO of asset management firm Ark Invest, is known for making bizarre projections about the future of cryptocurrencies. While these predictions would make any token investor much richer, there are some very strong assumptions behind the predictions that have a very low probability of actually occurring.
Wood made several predictions about Bitcoin, always increasing the target price. Earlier in the year, Wood noted that the “base case“for Bitcoin it would be $600,000. However, this prediction has been raised to as much as $3.8 million by 2030:
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“Last year we made our bullish case for Bitcoin. It was $1.5 million. With this institutional green light that the SEC provided, although it was kicking and screaming, the analysis we did is that if institutional investors allocated a little more than 5% of their portfolios for Bitcoin, as we think will happen over time, that alone would add $2.3 million to the projection I just presented,” Wood said.
According to Kevin O’Leary, entrepreneur and host of “Shark Tank,” “That kind of appreciation would mean the American economy has collapsed, in my opinion. So that’s not good speculation.”
O’Leary goes on to say that many see Bitcoin as a hedge against economic downturns and that it has a “grip to 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 economy or the US economy will collapse anytime soon, which, according to his logic, would make it almost impossible for Bitcoin to reach Wood’s price target.
One caveat to O’Leary’s argument is that Wood’s prediction depends on institutional investment. Wood and Ark believe that high levels of institutional involvement in Bitcoin could drive the price higher. While this could happen, the likelihood of institutions placing “a little more than 5% of their portfolios in Bitcoin” is close to zero.
While a global economic collapse or a huge level of institutional investment could potentially drive Bitcoin to new heights, these events are very unlikely to occur. Furthermore, it is important to note that Wood is interested in spreading the word about Bitcoin and making the future look very bright. In January 2024, Ark was one of several companies that launched a spot Bitcoin ETF. If Wood can get investors excited about Bitcoin through her predictions, she could influence investors to start trading Bitcoin ETFs and, more specifically, the Ark ETF.
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This article Kevin O’Leary responds to Cathie Wood’s Bitcoin prediction: ‘The US economy would have to collapse’ originally appeared in Benzinga.com
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