The value proposition of Bitcoin (BTC) is on full display amid the current banking crisis, which will only “attract more institutions” to the BTC market over time, ARK Invest CEO Cathie Wood believes.
“The fact that Bitcoin moved in a very different way from the equity markets, in particular, was quite instructive,” she added.
ARK Investment Management CEO Cathie Wood says the behavior of the Bitcoin’s price through the latest banking turmoil will attract more institutions and investors https://t.co/2d8cT7SX3n pic.twitter.com/Eaymh05lhq
— Bloomberg Crypto (@crypto) March 21, 2023
Institutional interest in Bitcoin may have already arrived, according to Oliver Linch, the CEO of Seattle-based crypto exchange Bittrex.
Linch noted in a March 21 interview on The Wolf Of All Streets podcast that many big banks bought into crypto as an investment product well before the recent banking crisis:
“The big talking point of this bear market is institutional interest in crypto. Every big bank now has a substantive crypto desk, not just for trading, but for partnerships as well.”
However, he said that there’s still a divide between traditional financial institutions and crypto firms, which has caused headwinds in institutional adoption over the last few months.
“Historically, those big players have been the biggest drivers of innovation,” he said, adding that the two sides are currently “stuck in a bit of a rut” and that the “big change” won’t happen until they stop fighting for superiority.
“It’s not crypto versus Goldman Sachs or crypto versus institutions. It’s a race to who can do crypto better.”
As for the impact on Bitcoin’s price from the institutional interest, Wood explained in the interview that ARK Invest’s $1-1.5 million BTC price prediction by 2030 was made on the back of an institutional investor BTC allocation analysis, which estimates most firms would allocate between 2.5% to 6.5% to BTC in their investment portfolios.
“These are the sorts of allocations that they would have made to emerging, new categories of assets like real estate in the 70s and small caps in the 80s and 90s,” Wood added.
Linch, on the other hand, believes that “aggressive” institutional adoption will come when opportunities become more easily identifiable:
“Show them a way that it can be done and it can make them money and I guarantee you they won’t stand in the way of that. They’ll be pedal to the metal to exploit that opportunity.”
Positive sentiment has surrounded Bitcoin following the collapses of Silvergate, Silicon Valley Bank and Signature banks. BTC has surged 43.6% since its most recent low on March 11, compared with a 25.3% increase in the broader crypto market over that time, according to CoinGecko data.