According to the findings of a study by Ark Investment Management (AIM), the value of bitcoin can potentially increase by $40,000 if all S&P 500 companies allocate 1% of their cash holdings to the crypto. Similarly, if all these companies were to convert 10% of cash holdings into bitcoin, the value of the crypto asset will potentially rise to $400,000.
The study findings, which are based on December 1, 2020 data, seem to get validation from BTCâ€™s price movement after Square and Microstrategy acquisitions. As on-chain data shows, the value of the crypto asset went up after the two companies announced their BTC acquisitions.
Still, in making the case for a greater allocation of bitcoin in institutional portfolios, the AIM study says:
Further, the study findings also show that during the past decade, â€œbitcoin is the only major asset with consistently low correlations to traditional asset classes.â€
Less Hype During 2020 Bull Market
Meanwhile, in addition to the price predictions, the study finds that the last bitcoin rally was driven less by hype. According to the study summary, â€œbitcoinâ€™s search interest is low relative to the increase in its price.â€ Consequently, as bitcoin price neared all-time highs, the digital assetâ€™s â€œGoogle search interest was at 15% of its all-time high.â€
Another key takeaway from the study is AIMâ€™s assertion that â€œbitcoin offers one of the most compelling risk-reward profiles among assets.â€ In the findings, AIM says:
Consequently, AIM says â€œcapital allocators should consider the opportunity cost of ignoring bitcoin as part of a new asset class.â€ In the meantime, the study suggests bitcoinâ€™s apparent acceptance could well â€œset the stage for ethereum and a new wave of financial experimentation.â€
Do you agree with Ark Investmentâ€™s view that BTC value will skyrocket if all S&P 500 companies buy the crypto? You can tell us what you think in the comments section below.
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