Even though Bitcoin is trading close to its all-time high of $111,814 set in May, ARK Invest, led by renowned tech investor Cathie Wood, maintains an optimistic outlook. According to ARK Invest's May Bitcoin report, several "bullish" signals are reinforcing this confidence.
One notable sign that ARK points out is the aggregate unrealized profits of Bitcoin, which are currently just one standard deviation away from the average price in the current cycle. The report emphasizes that in previous cycles, the PnL index needed to reach three standard deviations to indicate "irrational exuberance." This implies that Bitcoin has not yet reached an overly euphoric stage and still has room for growth.
The report also indicates a significant increase in inflows into #ETFbitcoin funds, especially when compared to global gold ETFs. In May, inflows into global gold ETFs decreased from $9.2 billion to about $1.5 billion, while Bitcoin trading products increased by over 120%, from $2.5 billion to $5.5 billion. This indicates a significant shift of capital from gold to Bitcoin.
Ultimately, as Bitcoin's price increases, key support levels are also being raised, currently ranging from $94,000 to $97,000. This level has surpassed the 200-day moving average, on-chain average, and the cost basis of short-term holders. These are strong technical signals indicating solid price consolidation for Bitcoin.
However, the May report from #ArkInvest also does not overlook bearish factors, such as decreased trading volume and the number of contributions to the Bitcoin Core development reaching a 10-year low (704 contributions, nearly a 10-fold decrease from 2021). The report suggests that this decline underscores Bitcoin's increasingly prominent role as a fixed monetary asset on a dynamic development platform.
Additionally, Bitcoin's recent performance occurs against a backdrop of neutral and bearish macroeconomic conditions, such as the increasing number of sellers compared to buyers in the U.S. housing market – a sign that ARK views as bearish for the broader market. The report also highlights rising supply costs and declining car sales as neutral market signals.
Despite mixed signals in the short term, this is unlikely to change the views of Cathie Wood and ARK Invest, who have made extremely optimistic predictions about the future price of Bitcoin. In 2024, Wood stated that Bitcoin could reach $1 million each, "deeply" tapping into global gold demand – a theme reiterated in the May report.
In fact, ARK Invest even made a more optimistic prediction earlier this year, suggesting that by 2030, Bitcoin could reach $2.4 million each. This prediction is based on their experimental model, considering "active supply" – i.e., the amount of tokens in circulation that are not held for a long time or lost. Even in the "bear case" scenario of that model, Bitcoin still has a price of $500,000 in 2030 – still nearly 5 times higher than the current price. Bitcoin is currently up 0.7% in the last 24 hours, reaching $109,360, just 2% away from its all-time high, according to CoinGecko.
