According to the findings of a study by Ark Investment Management (AIM), bitcoin’s value could potentially increase by $ 40,000 if all S&P 500 companies allocate 1% of their cash to the cryptocurrency. Likewise, if all of these companies were to convert 10% of their cash into bitcoin, the value of the crypto asset could potentially rise to $ 400,000.
The study findings, which is based on data from December 1, 2020, appear to be validated by BTCprice movement after the acquisitions of Square and Microstrategy. As data from the chain shows, the value of the crypto asset surged after the two companies bought their BTC acquisitions.
Still, in advocating for greater allocation of bitcoin in institutional wallets, the AIM study says:
Beyond traditional rules and regulations and generally not correlated with the behavior of other asset classes, bitcoin appears to have earned a strategic allocation in well-diversified wallets.
Furthermore, the study’s findings also show that over the past decade “bitcoin has been the only major asset with consistently low correlations with traditional asset classes.”
Less hype during the 2020 bull market
Meanwhile, in addition to price predictions, the study finds that the latest bitcoin rally was less hype-driven. According to the summary of the study, “bitcoin’s search interest is low relative to the rise in price.” As a result, when bitcoin price approached its all-time high, the digital asset’s ‘Google search interest’ was 15% of its all-time high. ‘
Another key point from the study is AIM’s claim that “bitcoin offers one of the most attractive risk-reward profiles among assets.” In the findings, AIM says:
As our analysis suggests, it could scale from about $ 500 billion to $ 1-5 trillion in network capitalization in the next five to 10 years. “
That’s why AIM says that “capital distributors should consider the opportunity cost of ignoring bitcoin as part of a new asset class.” In the meantime, the study suggests that bitcoin’s apparent adoption could well “ pave the way for ethereum and a new wave of financial experimentation. ”
Do you agree with Ark Investment’s opinion? BTC value will skyrocket if all S&P 500 companies buy the crypto? You can tell us what you think in the comments below.
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