ARK’s Big Ideas 2020 report points out the potentials to push Bitcoin to $1 trillion market cap
ARK’s Big Ideas 2020 highlights Bitcoin as a transformative technology. Published by Ark Investment Management, a New York-based adviser focused on breakthrough innovation, the report highlights three use cases that could push Bitcoin to a $1 trillion market cap, including the medium of exchange, store of value, and protection against asset seizure.
The report estimates that Bitcoin (BTC) will have a network value of over $1.1 trillion if it eventually replaces a fraction of the $40 trillion money supply. The researchers also indicate that the leading cryptocurrency is better than gold as a store of value because it is portable, scarce and auditable. As a viable gold replacement, Bitcoin’s market cap can skyrocket by $800 billion if it captures 15% of gold’s $9 trillion market cap.
Finally, if high-net-worth individuals were to invest 5% of their $46 trillion wealth in Bitcoin to protect against possible asset seizure, Bitcoin’s market cap would ascend by $1.3 trillion.
There are 11 categories in the report and cryptocurrency is mentioned in number 10 and 11:
Digital Wallets — The Transformation of Banking
According to ARK’s research, digital wallets will be valued at a premium to retail banks and, thanks to their low cost of customer acquisition, will offer banking services to low-income earners in a way that traditional banks cannot. Given ARK’s estimate of 220 million digital wallets in the US by 2024, if every user were to be valued according to the lifetime value of traditional bank customers, the digital wallet opportunity could be worth more than $800 billion.
For example, Chinese mobile payments are 2.5x the size of GDP, digital payment adoption is occurring 2x faster than social media took off in the U.S. Digital wallets are also taking share in the consumer credit market and have valued at a Discount to Banks.
Bitcoin — An Evolution of Monetary Systems
Because of bitcoin, we are witnessing a global battle among monetary systems, both sovereign and nonsovereign. As an open, neutral, and permissionless global monetary system with no reliance on the State, bitcoin is in a good position to win this battle.
If it does, ARK believes the result will be measured in trillions, more than an order of magnitude higher than its $150 billion network value today.
Among cryptocurrencies, Bitcoin is well-positioned to satisfy these assurances:
- Money will be transferred and stored seamlessly.
- Money will not be diluted arbitrarily.
- Money will not be frozen or seized.
- Money supply will be auditable, and transactions will be uncensored.
- Record of transactions will be secure and immutable.
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