This Crypto ETF Could Soar 1,500%, According to Cathie Wood
12/08/2024 18:35
In fact, one crypto ETF tracks an investment of hers that Wood believes has more than 1,500% in potential upside over the next few years. When it comes to Bitcoin ETFs, the giant in the room is the iShares Bitcoin Trust ETF (NASDAQ: IBIT). The iShares Bitcoin Trust ETF does charge an expense ratio of 0.12%, but that's fairly low for ETFs in general.
All eyes are on Bitcoin (CRYPTO: BTC) after the cryptocurrency breached the $100,000 mark. Many investors think it's too late to jump in. But according to growth investor Cathie Wood, the best is still to come. In fact, one crypto ETF tracks an investment of hers that Wood believes has more than 1,500% in potential upside over the next few years.
Buying Bitcoin directly is the best bet for most investors looking to get exposure to the most popular cryptocurrency on the planet. But not everyone has the ability to do so. To make it easier, several ETFs have launched that aim to track the underlying price performance on Bitcoin. In most cases, these ETFs hold Bitcoin, and your position in the ETF corresponds to an underlying position in Bitcoin. It's not a perfect system, but it's yet another tool that makes gaining exposure to cryptocurrencies a whole lot easier.
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When it comes to Bitcoin ETFs, the giant in the room is the iShares Bitcoin Trust ETF (NASDAQ: IBIT). This vehicle is by far the largest Bitcoin ETF, with more than $48 billion in total assets. This ETF launched in early 2024. So far, it has already risen in value by around 115%. The iShares Bitcoin Trust ETF does charge an expense ratio of 0.12%, but that's fairly low for ETFs in general. Plus, this ETF greatly simplifies your taxes versus owning cryptocurrencies directly. So for many, the benefits far outweigh the nominal expense.
Whether you buy Bitcoin directly or own it indirectly through a fund like the iShares Bitcoin Trust ETF, one major question looms: Is it too late to buy Bitcoin? Not according to iconic growth investor Cathie Wood. Earlier this year, she reiterated her prediction that Bitcoin's price will reach $650,000 by 2030. However, if certain conditions are met, she believes the price could soar as high as $1.5 million, suggesting at least 1,500% in additional upside.
What makes Wood so bullish? She sees increasing regulatory certainty driving new institutional adoption of Bitcoin, while its increasing price instills greater awareness for its diversification benefits. She believes Bitcoin is here to stay -- and in many ways, we're still very much in the early innings of its global adoption cycle.
There's one more reason I'm a big fan of Bitcoin and Bitcoin ETFs moving forward.
There's no doubt that institutional investment can provide a huge tailwind for Bitcoin's value. But I have an even simpler barometer for gauging where Bitcoin's value could ultimately end up: The market cap of gold.
Right now, the market cap of gold is roughly $18 trillion. The market cap for Bitcoin, meanwhile, is still just $2 trillion. On this metric alone, Bitcoin's price would need to rise nine times in value to reach gold's total value. I think this is a very reasonable long-term target for the price of Bitcoin. Bitcoin's technology and ability to sustain itself in a decentralized manner are now beyond doubt. It has the staying power of any conventional currency. In fact, there's a reality in which Bitcoin could outlast some of those currencies, since it doesn't require a nation state to survive. The same is true for gold. Nations may rise and fall, but gold remains.
In this regard, I think Bitcoin is a rarity. Very few true "stores of value" come into existence. But when they do, they stick around for a long time. Precious metals are a great example of this, and bonafide cryptocurrencies like Bitcoin should prove another example. Make no mistake: There's a lot of utility value for Bitcoin, too. But even judging it simply as a store of value implies plenty of long-term upside.
It's not too late to buy Bitcoin, whether it's purchased directly or through an ETF like the iShares Bitcoin Trust ETF.
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Ryan Vanzo has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.
This Crypto ETF Could Soar 1,500%, According to Cathie Wood was originally published by The Motley Fool