Bitcoin (BTC) could hit or even surpass a whopping $ 535,000 if corporate buyers convert just 10% of their cash reserves into the largest and most popular cryptocurrency
The investment firm Ark Invest released a report last week called “Bitcoin: preparing for institutions,It concluded that just an allocation of 1% cash reserve from the S&P 500 companies in BTC would be enough to raise the price of Bitcoin by around $ 40,000.
The BTC allocation of companies could be anywhere between 2.55% and 6.55%.
The report’s findings come from the fact that institutional buyers continue to view Bitcoin as a long-term alternative to cash rather than a speculative asset. One transaction in particular drew attention to this scenario when $ 500 million left Coinbase.
Ark Invest stated: “Based on search volume compared to 2017, the BTC price spike seems much less hype driven. As Bitcoin gains more trust, some companies are now viewing it as cash on their balance sheets.”
The firm also forecast that the likely allocations would likely be well above 1%. “Based on the daily returns of all asset classes over the past decade, our analysis suggests that companies’ allocations to BTC should be between 2.55% while minimizing volatility and 6.55% while maximizing returns.Ark noted, adding:
“Based on Ark’s simulated portfolio allocations, corporate allocations between 2.5% and 6.5% could increase the price of BTC by $ 200,000 to $ 500,000.”
Bitcoin’s price hike is not only good for investors, but also for the network itself. While its use case as a means of payment is currently not feasible due to the volatility of BTC, one could argue that even a 5-digit price move once the price is sufficiently high does not affect users who want to buy coffee. This is because they would be using satoshi, a unit a hundred million times smaller than Bitcoin itself.