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ARK Invest Says Optimal Bitcoin Portfolio Allocation for 2023 Was 19.4%, Up from 0.5% in 2015

Cathie Wood-led Ark Invest believes Bitcoin price will rally exponentially in the confirmed bull cycle as more investable global assets amounting to $250 trillion proliferate to the digital asset class.

Ark Investment Management LLC, a top-rated privately held fund manager that recently received the green light to issue spot Bitcoin exchange-traded funds (ETF), has released its annual report focused on big ideas in 2024. According to the 163-page report, the Cathie Wood-led Ark Invest highlighted that Bitcoin has grown to be an integral part of well-performing portfolios amid increased global geopolitical tensions.

Ideally, the report emphasized that a larger allocation of Bitcoin to investment portfolios plays a crucial role over longer time horizons. Furthermore, the report pointed out that Bitcoin price performance over the past seven years has outshined all other asset classes led by Gold, commodities, real estate, equities, and bonds.

“Over the last seven years, Bitcoin has registered an annualized return far surpassing that of major asset classes, with an optimal allocation rising to 19.4 percent in 2023. Our analysis suggests that allocating 19.4 percent to Bitcoin in 2023 would have maximized a portfolio’s risk-adjusted returns,” the Ark Invest 2024 report emphasized.

While still acknowledging the risks associated with Bitcoin including price volatility, manipulation, and liquidity uncertainty, among others, Ark Invest noted that more investors will continue to allocate their portfolios to the new digital asset class. Meanwhile, Ark Invest hypothesized the allocation of the $250 trillion of global investable assets to Bitcoin and concluded the bulls are undeniably in control.

On the lower end, where 1 percent of global investable assets are allocated to Bitcoin, Ark Invest found out that the BTC price will comfortably reach $120,000. In the mid-range where about 4.8 percent of global investable assets enter the Bitcoin market, the report highlighted BTC price will reach $550k. And on the higher end where approximately 19.4 percent of global investable assets proliferate into Bitcoin, Ark Invest sees Bitcoin reaching $2.3 million per coin.

Bitcoin and the Market Picture

According to the Ark Invest report, the highly anticipated Bitcoin bull cycle is at hand based on the on-chain market mean indicator. Notably, the indicator used with other fundamental aspects like the approval of spot Bitcoin ETFs in the United States and the upcoming halving confirms more gains will be registered in the coming two years.  As a result, Ark Invest has continued to increase its exposure to Bitcoin, especially through the recently launched ARK 21Shares Bitcoin ETF, which currently has total assets under management (AUM) of about $661 million.

With the Celsius and FTX bankruptcy cases almost completely resolved, more investors have doubled down their holdings in Bitcoin to fight global inflation. According to on-chain data, Bitcoin addresses holding more than 1,000 coins have continued to increase despite the miners’ accelerated selling pace.

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