Tesla and Elon Musk devotee Cathie Wood issued a serious warning regarding Bitcoin and Ethereum, but stuck to her massive $ 500,000 forecast

0


Bitcoin, ethereum, and other major cryptocurrencies have fluctuated strongly this week, rebounding from a closely watched bitcoin upgrade.

Subscribe now to Forbes CryptoAsset & Blockchain Advisor and discover new NFT and crypto blockbusters ready to earn 1000%

The price of bitcoin has rebounded to around $ 60,000 per bitcoin after collapsing to $ 55,000 earlier this week. Ethereum, the second largest cryptocurrency by value, has meanwhile rebounded to all-time highs.

Now, as traders and investors await news on who will be the next chairman of the US Federal Reserve, Ark Investment Management chief executive Cathie Wood has renewed her huge forecast for the price of bitcoin, but has put in guard against the growing likelihood that the Fed will raise interest rates.

sign up now for free CryptoCodex—A daily newsletter for the crypto-curious. Help you understand the world of bitcoin and crypto, every day of the week


MORE FORBESWatch this key level as the price of Bitcoin, Ethereum, BNB, Cardano, Solana and XRP continues to climb

“There was a lot of fear,” Wood said this week, speaking on a call with the financial magazine Barron’s. “That was part of the reason for May’s correction. There was a chill associated with the end of quantitative easing and then rising.”

The price of bitcoin collapsed in May this year following a huge rally, with the crash largely attributed to China’s latest crackdown on bitcoin and crypto. The price of bitcoin lost around 50% of its value in a matter of weeks in May, but has since rebounded to a new all-time high of nearly $ 70,000.

This week, JPMorgan analysts reversed their prediction as to when the Fed will act to reduce inflation, now setting their rate hike forecast for September of next year, bringing it forward from 2023. JPMorgan s ‘Now expects the Fed to hike rates 0.25% from the third quarter of next year and keep raising them by 25 basis points each quarter “at least until real rates are to zero “, reported Reuters.

“I don’t think the Fed is going to do anything very quickly and that is also part of the wall of worry in the stock market and yet the stock market has continued to rise,” said Wood, who was made. a name. for itself with big bets on Bitcoin and Tesla, Elon Musk’s electric car company.

“You will have corrections for sure if the crypto market continues to grow as dramatically as it has recently, you will have these fears that will take hold of the market every now and then as people are just taking profits because the profits have been huge over the past year. “

However, despite concerns over short-term price volatility, Wood remains bullish on Bitcoin and Ethereum.

“The reason we used the $ 500,000 mark for a bitcoin price target is that if institutional investors get into bitcoin and allocate 5% of their portfolios to it, our estimate is that bitcoin will grow by 500. $ 000, “said Wood. “We can say that this happens by looking at on-chain analyzes,” referring to bitcoin transactions that are visible to anyone through their public blockchain.

CryptoCodex—A free daily newsletter for crypto-curious people

MORE FORBESWatch this key level as the price of Bitcoin, Ethereum, BNB, Cardano, Solana and XRP continues to climb

“We can see who is moving in and it looks like strong institutional holders are moving in. [to bitcoin]”she said, asking,” Why are they moving in? Because the correlation of returns between crypto, especially bitcoin, and other assets (stocks, bonds, currencies, commodities) is very low. Studies tell us that while there is a low correlation of returns between assets, [buying] this asset with the low correlation, you will increase returns and reduce risk over time. “

Wood named a 2019 Cambridge Associates report that advised institutional investors to look into bitcoin and crypto.

“What we weren’t expecting when we did our own bitcoin study, we weren’t expecting institutions, mostly businesses, to start diversifying their liquidity on the bitcoin balance sheet,” Wood said. . Tesla, led by bitcoin and crypto fan Elon Musk, popularized the idea that companies could add bitcoin to their balance sheets, following in the footsteps of enterprise software company Microstrategy.

“[Company, corporate and institution interest] will be another source of demand in the future, especially if the Financial Accounting Standards Board changes accounting rules and moves away from treating bitcoin as an intangible asset, ”said Wood.

Wood said she was also still bullish on Ethereum’s prospects, after Ethereum’s price jumped over the past year amid renewed interest in decentralized blockchain-based finance. (DeFi) and non-fungible tokens (NFT) – both largely built on top of Ethereum. network.

“We have become equally optimistic about [ethereum]”Wood said.” We are seeing DeFi and NFT taking off on the Ethereum network. “


Share.

Comments are closed.