At the current price of around $68,500, Bitcoin (CRYPTO: BTC) has a market capitalization of over $1.35 trillion, making it the most valuable cryptocurrency in the world. In fact, it accounts for more than half of the total $2.55 trillion market cap of the entire crypto ecosystem.

But Ark Investment Management and its technology investment lead, Cathie Wood, believe Bitcoin is destined to rise much higher. Ark’s research suggests the cryptocurrency could soar 2,115% to nearly $1.5 million by 2030 — but Wood herself offered an even more optimistic estimate recently, saying Bitcoin could soar 5,453% to $3 .8 million.

Investor enthusiasm for Bitcoin and the crypto industry in general is at an all-time high right now, but widespread adoption remains far from reach, so is Wood’s latest prediction realistic?

Image source: Getty Images.

Bitcoin may never replace traditional money

Bitcoin enthusiasts often say that cryptocurrency It is a valid candidate to replace traditional money because it is truly decentralized. It is not controlled by any person or institution, and its blockchainData-based registration system is accurate and transparent.

I disagree with the idea that it could replace existing currencies for a few reasons. The ability to control the money supply allows governments and central banks (such as the US Federal Reserve) to cushion economic shocks during turbulent periods. Furthermore, different economies operate at different speeds, which is why some currencies are more valuable than others.

If every country adopted one currency, like Bitcoin, many exporting nations would lose one of the mechanisms by which they remain competitive. For example, two countries that export oil may have different production costs because one may have higher labor standards than the other. As a result, that country would have to charge more money for exactly the same product. A weaker currency offsets some of this price difference for the buyer, which allows the exporting country to compete with those that have lower production costs.

The benefits of each nation having its own currency were also observed when the United Kingdom voted to leave the European Union in 2016 (an event known as Brexit). Investors feared that the UK would suffer economically from a decline in free trade with Europe, so they quickly devalued the British pound by 16% (relative to the US dollar). Pessimism aside, it instantly made the UK much more competitive as an exporter on the global stage, thus cushioning some of the economic shock.

Theoretically, the only way Bitcoin could be adopted as “the” global currency would be if all nations agreed to operate under a single government, with common economic goals. Given the current state of world politics, I’ll bet my last dollar that this won’t happen anytime soon.

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Few consumers and businesses have voluntarily adopted Bitcoin so far

The reality today is that very few businesses are willing to accept Bitcoin as payment for goods and services, which means consumers don’t have much incentive to hold it except for speculative purposes. According to Cryptwerk, only 9,449 merchants accept Bitcoin, which is a drop in the bucket considering there are over 300 million registered businesses globally.

Bitcoin fell 65% in 2022 and then rose 255% in 2023. This level of volatility would make managing cash flow impossible for any company, which is another argument against its usefulness as a currency.

Ark Invest points to eight Bitcoin use cases that could drive adoption by 2030. Most of them revolve around countries, businesses and consumers using Bitcoin to make payments and settle transactions. For the reasons I’ve already highlighted, I don’t like the likelihood of this happening on a large scale. But three of Ark’s potential use cases suggest that Bitcoin could be used as a store of value:

• Digital gold: Ark believes that Bitcoin could be treated like digital gold, which will create demand from multiple sources. Although Bitcoin is volatile, its decentralized nature and long-term upward trajectory support its credibility as a store of value.

• Corporate Treasury: If Bitcoin is seen as a store of value, Ark believes companies could hold a small portion of the cryptocurrency on their balance sheets. This could help offset inflationary pressures over time, for example.

• National treasure: Many global governments and central banks hold physical gold in their reserves. Again, Bitcoin could be a great addition to these reserves if it is seen as a store of value.

The Store of Value Argument Won’t Send Bitcoin to $3.8 Million

At the Bitcoin Investor Day conference in March, Wood said the recent launch of Bitcoin exchange-traded funds (ETFs) could generate a wave of demand from institutional investors. It’s one of the main reasons she believes the cryptocurrency could rise 5,513% from here to $3.8 million by 2030, which is well above her own company’s target of $1.5 million.

The problem with Wood’s prediction is that a price of $3.8 million per Bitcoin implies a final market value of $79.8 trillion. This means that Bitcoin would be almost 3 times more valuable than the entire US economy, based on the latest annual GDP figure of $28.3 trillion. It would also be 25 times more valuable than Microsoftwhich is today the largest company in the world.

To me, this doesn’t seem realistic. After all, the existence of ETFs does not suddenly make Bitcoin a viable currency worthy of widespread adoption. But as a store of value, it is conceivable that Bitcoin’s market capitalization could one day match that of gold, which currently stands at around $15.7 trillion.

This implies that Bitcoin could trade at $817,000, which would represent a 1,094% upside from here. So the cryptocurrency could still deliver attractive gains if enough investors view it as a store of value, but I wouldn’t bet on it rising 5,513% from here to meet Wood’s prediction.

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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Bitcoin and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Bitcoin could rise 5,453% by 2030, according to Cathie Wood. But is this realistic? was originally published by The Motley Fool

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