Price expectations on ARK research

So, first of all, do your own research (DYOR) and don't take this as financial advise in any way daradaradara…

Yesterday I came across this report from ARK, I'm invested in mutual funds with like 30% exposure to ARK ETF's so I receive the reports on my mail but haven't read it untill now.

Spoiler: It's stupidly bullish.

Page 37 to 55 talk about Bitcoin economic studies they did.

Long story short, they say an "optimum" point for hedge fund is an exposure betwen 2.55% (minimizing volatility) to 6.55% (maximizing sharpe ratio) on Bitcoin, the risk reward ratio of it is ridicolous. Also they hipotesise on 2 possible outcoms in terms of adoption by institucions:

  • Corporations on the S&P500:
    • A: Every corpoation there put a 1% allocation of their cash reserve in Bitcoin
    • B: Every corporation there put a 10% allocation of their cash reserve in Bitcoin

  • Institucional Investors (High Net Worth Individuals, Insurance Companies, Pension Funds etc..)
    • C: Institucional Investors put a 1% allocation to BTC.
    • D: Institucional Investors put a 2.55% allocation to BTC to minimize volatily.
    • E: Institucional Investors put a 6.55% allocation to BTC to maximize the Sharpe Ratio.

  • **PRICE IMPACT WITH EACH SCENARIO (**This was calculated upon a U$15,000 Bitcoin)
    • A: U$ 40,000 increase.
      • A+C: U$118,000 increase aprox.
      • A+D: U$ 240,000 increase
      • A+E: U$ 540,000 increase
    • B: U$ 400,000 increase
      • B+C: U$ 478,000 increase
      • B+D: U$ 600,000 increase
      • B+E: U$ 900,000 increase
    • C: U$ 78,000 increase aprox.
    • D: U$ 200,000 increase
    • E: U$ 500,000 increase

So, to sum it up, ARK is expecting the price of bitcoin (with an adoption anywhere between 1% to 10% from corporations on the S&P500 over their cash reserves and from Institucional Investors between 1% to 6.55%) to be anywhere between U$ 55,000 to U$915,000. I do believe we are at the start of this adoption cycle and nowhere near the top, current prices are just a bit short to the lowest ARK scenario.

submitted by /u/StackThoseSats
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