In case you didn’t know, Bitcoin (CRYPTO:BTC) is back. The granddaddy of cryptocurrencies lost more than 70% of its value between November 2021 and November 2022. However, it has almost quadrupled since then.
Could Bitcoin sustain this momentum? Ark Invest founder Cathie Wood believes so. It expects the red-hot cryptocurrency to rise more than 5,600%. However, not everyone agrees with her – not even an active trader on Capitol Hill.
Why Wood is so bullish on Bitcoin
Eleven investment firms received approval from the US Securities and Exchange Commission (SEC) to offer spot Bitcoin exchange-traded funds (ETFs) in early 2024. Wood’s Ark Invest was one of them. Several Bitcoin-focused ETFs are now being marketed.
The inflow of money into these new ETFs offered by Ark Invest and others has boosted demand for Bitcoin. Wood said at the Bitcoin Investor Day conference in March that the SEC approval served as an “institutional green light.” She added that Ark Invest expects institutional investors to invest just over 5% of their portfolio in Bitcoin in the future. According to analysis by Ark Invest, this could push the price of Bitcoin to $3.8 million.
There’s another reason Wood likes Bitcoin in the short term: the cryptocurrency’s halving. This halving occurs approximately every four years. The last one took place on April 19th.
Bitcoin skyrocketed following previous halvings in 2012, 2016 and 2020. Wood predicted at the Bitcoin investor conference that this year’s halving should also be a big catalyst.
A congressman from Michigan who is negative about crypto
Rep. Shri Thanedar, D-Mich., doesn’t share Wood’s rosy outlook on Bitcoin. The congressman recently gave up his Bitcoin stake. Thanedar didn’t even wait for the halving; he sold on February 5, 2024.
The Michigan Democrat isn’t just negative about Bitcoin. On the same day he sold Bitcoin, he also shorted his holdings in it ether And LiteCoin.
Has Rep. Thanedar Become a Crypto Bear? Perhaps. But even if so, his pessimistic view is not limited to cryptocurrencies. Thanedar has also been aggressively selling several stocks in the last few months, including alphabet, Amazon, AppleAnd Microsoft.
His sales also extended beyond the so-called “Magnificent Seven” stocks. In January, Thanedar reduced its stake in Warren Buffett Berkshire Hathaway to.
Bitcoin: buy or sell?
Is Bitcoin a Real Buy or Sell? I’m somewhere in the middle of the spectrum.
I doubt Wood’s prediction that institutional investors will park more than 5% of their portfolios in Bitcoin will come to pass. So far, the recent halving has not sparked a major boost for the cryptocurrency.
On the other hand, I don’t think investors should necessarily abandon their positions in Bitcoin, as MP Thanedar did recently. I suspect that his sale of all of the aforementioned stocks will prove short-sighted in the long run.
Buffett once described Bitcoin as “rat poison squared.” The legendary investor is right that cryptocurrency does not have the same intrinsic value as stocks. However, a similar argument could be made for gold – and investors have been buying it for a long time. However, since Bitcoin is only worth what people think it is worth, it is easy to imagine that it could be worth much more – or much less – in the future.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keith Speights has positions at Alphabet, Amazon, Apple, Berkshire Hathaway and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Bitcoin, Ethereum and Microsoft. The Motley Fool recommends the following options: long $395 January 2026 calls on Microsoft and short $405 January 2026 calls on Microsoft. The Motley Fool has a disclosure policy.
Cathie Wood Expects This Red-hot Cryptocurrency to Surge 5,600%, But a Congressman Has Dumped His Crypto Stake was originally published by The Motley Fool