Bitcoin by 2030: Is Bitcoin Worth Investing?

Three reasons you could miss Bitcoin reaching $1,480,000 in 2030

Is bitcoin worth investing? Get ready to have your mind blown.

I’ve extracted several key pages on Bitcoin from the Big Ideas 2023 Report by Ark invest to explain how my crypto OG evangelist mind was blown apart. I’m so long on Bitcoin I didn’t think it was possible to find new intel capable of such positive mental disruption.

BTW I’m capitalizing “Bitcoin” here which usually refers to the network and “bitcoin” refers to the coin. The reference to “Bitcoin” is for the total value proposition.

Who is Cathie Wood and Ark Invest?

Cathie Wood is founder and CEO of Ark Invest and she has a long track record in economics and finance since 1977. Her firm focuses on multiple areas of innovation and technology. Here are a few categories to demonstrate their range of research and investments:

Artificial intelligence

Public blockchains

Bitcoin

Precision therapies

Molecular diagnostics

Electric vehicles

Autonomous ride-hail

Autonomous logistics

Robotics and 3D printing

Orbital aerospace

I realized how my range of focus is very narrow (crypto 24/7). I also didn’t know some of those categories existed. Nonetheless, the list shows Ark’s expertise and ability to analyze emerging technologies as highlighted in their annual Ark Invest Big Ideas Whitepaper. Bitcoin has its own special section in the 2023 report and for several years running.

Ark Invest's rare recipe

Ark Invest is extremely diversified in its research and investment strategy and Cathie Wood’s decades of experience in legacy finance combine into one of the best recipe’s for a reliable source of Bitcoin price predictions and value proposition analysis. There are plenty of evangelists in the crypto space but finding highly credible stakes in the sand are rare finds. I think Ark Invest is one of those tier 1 categories.

Reasons you could miss Bitcoin value in 2030

1. Bitcoin's risky drawdown illusion

I wasn’t in crypto in 2011 but I know the other 3 drawdowns very well. Drawdowns of 94%, 88%, 84% and 77% are the definition of volatility and that doesn’t cover all the other crazy ups and downs. At first glance most investors would look at this one piece of intel and say “I’m out”, as in I’m not buying Bitcoin because it’s too risky and not for me. Stopping short of the next slide would be a travesty. As with anything you must look at it from multiple angles.

Source: Ark Invest Big Ideas 2023

2. Bitcoin's high returns hidden in plain sight

As the slide below states, “Bitcoin’s volatility has obscured it’s long-term returns". I knew Bitcoin returns were good, but not this good. Bitcoin blows away global equity, global debt and gold in the compound annual returns chart for 3, 4 and 5 years and it’s not even close. The lowest return for Bitcoin is 152% for 3-year returns, while the highest return for other assets is 10.6% for 3-year returns of global equities. You’d think people would be clamoring over 152% returns (on the low side) but most investors haven’t figured this out yet.

Source: Ark Invest Big Ideas 2023

3. Bitcoin's (falsely perceived) small window

The majority of investors and news outlets are focused on an old recurring message, like “Bitcoin is trading at $28,000 way down from it’s all time high (ATH).”  It really comes down to what window of time you focus on. I’m super LONG on Bitcoin so I see the difference between the 2021 ATH of $69,000 and $28,000 as rounding error. In the long tail there is no difference between the two.

Key Takeaways

There are two key takeaways from the fundamentals chart below which are essentially the same and stood out to me.

1. The Supply of BTC Last Moved > Than 1 Year Ago is 66.5% (WOW)
2. The Long-Term Holder Supply is 71.8%

Hodlers (hoarders in Bitcoin) don’t sell their Bitcoin

For simplicity let’s says the Bitcoin circulating supply was 19,000,000 at the time of this chart so 12,635,000 are locked up in cold storage by people like me who are super LONG on BTC and may never sell. That only leaves the remaining 6,365,000 BTC potentially available in the market. The number of people going LONG has gone up 50% since 2017. Do you see where this is going? Economics 101 says increasing demand coupled with dwindling supply equals stratospheric increases in price. Is Bitcoin worth investing? You decide. The Bitcoin supply is one of the 5 Superpowers of Bitcoin.

How is long-term holder supply different?

The long-term holder supply is any wallet that hasn’t moved Bitcoin in MORE than 155 days. Ark has determined that the probability of anyone moving BTC after 155 days goes down to the point that it approaches the supply of BTC last moved more than a year ago. Therefore, BTC held for greater than 155 days is a proxy for long term hodlers. If you hold for that long you will hold it for a very long time.

Source: Ark Invest Big Ideas 2023

The 7 metrics for Bitcoin value basis

While there are many other cool things to highlight in this report, let’s wrap it up with the money slide. The chart below shows the bear, base and bull case for Bitcoin in 8 short years. The bear case at $258,500 is insane. What other asset is going to 10X in 8 years? (Assuming a June 2023 BTC price) If the bear case isn’t good enough, then take the bull case for $1,480,000 million per Bitcoin. The basis for the value is determined by market penetration in seven key areas such as remittances, nations state treasuries and gold, for example.

Bull case

The real mind-shattering thing here is the bull case column shows conservative penetration rates most of which are 10% or less except gold and remittances. Taking 50% of gold feels reasonable considering Bitcoin is superior to gold in many ways. The 25% penetration for remittances is the only one I don’t agree with. Unless this metric is considering adoption of the Bitcoin Lighting Network (super-fast and cheap BTC transactions), then other crypto designed for speed, low fees and transaction finality will likely take some market share. The Bitcoin value proposition doesn’t fit the global high transactions scenario for remittances.

Key Takeaway

Ark’s bull case assumptions appear conservative which means the bull price of $1,480,000 million per Bitcoin could be dwarfed by some other crazy number. More institutions are going to buy and hold BTC in bigger chucks for very long periods of time (like in perpetuity) so the supply becomes very small very quickly. Ultra-low supply and ultra-high demand results in an ultra-high price.

Source: Ark Invest Big Ideas 2023

If you're wondering what the best cryptocurrency is, I’d say there you have it. It’s Bitcoin.

And remember, 

Your goal is always to get a Crypto Bullseye™.

Yours in Crypto, 

Kirk David Phillips, CPA, CMA, CFE, CBP