The price of 1 BTC could reach as hih as $500,000 and above if corporate buyers convert 10% of their cash reserves to bitcoin.
In one of the various conclusions from its latest report, “Bitcoin: Preparing for Institutions,” investment firm Ark Invest said that even a 1% allocation from S&P 500 companies would be enough to increase BTC/USD spot prices by $40,000.
Minimum corporate BTC allocation: 2.55%
The findings come as institutional buyers continue to focus on Bitcoin as a long-term alternative to cash, with one transaction in particular drawing attention after $500 million left Coinbase.
“Based on search volumes compared to 2017, bitcoin’s price increase seems to be driven less by hype. With bitcoin appearing to gain more trust, some companies are considering it as cash on their balance sheets,” the report reads.
In terms of the longer-term impact that corporations could have on Bitcoin’s scarcity, Ark forecast that probable allocations would likely far outstrip the 1% level.
“Based on daily returns across asset classes during the past 10 years, our analysis suggests that allocations to bitcoin should range from 2.55% when minimizing volatility to 6.55% when maximizing returns,” it wrote, adding:
“Based on ARK’s simulated portfolio allocations, institutional allocations between 2.5% and 6.5% could impact bitcoin’s price by $200,000 to $500,000.”
Culled from CNBC