All eyes are focused Bitcoin (CRYPTO: BTC) after the cryptocurrency crossed the $100,000 mark. Many investors think it is too late to get in. But according to growth investor Cathie Wood, the best is yet to come. One crypto ETF even tracks an investment of hers that Wood believes has a potential upside of more than 1,500% in the coming years.
Buying Bitcoin directly is the best choice for most investors looking for exposure to the world’s most popular cryptocurrency. But not everyone has the opportunity to do this. To make things easier, several ETFs have been launched that aim to track Bitcoin’s underlying price performance. In most cases, these ETFs contain Bitcoin and your position in the ETF corresponds to an underlying position in Bitcoin. It’s not a perfect system, but it’s one more tool that makes gaining exposure to cryptocurrencies a 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 over $48 billion in total assets. This ETF was launched in early 2024. It has already increased in value by about 115% so far. The iShares Bitcoin Trust ETF does charge an expense ratio of 0.12%, but that is quite low for ETFs in general. Additionally, this ETF greatly simplifies your taxes compared to owning cryptocurrencies directly. For many, the benefits far outweigh the nominal costs.
Whether you buy Bitcoin directly or own it indirectly through a fund like the iShares Bitcoin Trust ETF, one important question arises: Is it too late to buy Bitcoin? Not according to iconic growth investor Cathie Wood. Earlier this year, she reiterated her prediction that the price of Bitcoin will reach $650,000 by 2030. However, if certain conditions are met, she believes the price could rise to $1.5 million, indicating additional upside potential of at least 1,500%.
What makes Wood so optimistic? She sees increasing regulatory certainty driving new institutional adoption of Bitcoin, while its rising price is driving greater awareness of its diversification benefits. She believes Bitcoin is here to stay – and in many ways we are still in the early stages of the global adoption cycle.
There’s another reason why I’m a big fan of Bitcoin and Bitcoin ETFs.
There is no doubt that institutional investments can provide tremendous support to Bitcoin’s value. But I have an even simpler barometer for measuring where Bitcoin’s value might ultimately end up: gold’s market cap.
Currently, the market capitalization of gold is approximately $18 trillion. The market cap for Bitcoin, meanwhile, is still only $2 trillion. Based on this metric alone, Bitcoin’s price would need to increase in value nine times to reach the total value of gold. I think this is a very reasonable long-term target for Bitcoin’s price. Bitcoin’s technology and ability to sustain itself in a decentralized manner are now beyond question. It has the staying power of any conventional currency. In fact, there is a reality in which Bitcoin could do that to survive some of those currencies, because there is no need for a nation state to survive. The same goes 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” emerge. But when they do, they stick around for a long time. Precious metals are a good example of this, and bona fide cryptocurrencies like Bitcoin should be another example. Make no mistake: Bitcoin also has a lot of utility value. But even if we consider it purely as a store of value, there is a lot of benefit in the long run.
It’s not too late to buy Bitcoin, whether purchased directly or through an ETF like the iShares Bitcoin Trust ETF.
Consider the following before purchasing shares in iShares Bitcoin Trust:
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Ryan Vanzo has positions in Bitcoin. The Motley Fool holds and recommends positions in Bitcoin. The Motley Fool has a disclosure policy.
This Crypto ETF Could Rise 1,500%, According to Cathie Wood was originally published by The Motley Fool
