Kathy Wood’s ARK Investment expect According to a new report published by an investment management firm, the price of Bitcoin will rise to $1 million per coin by 2030, sharply increasing annual fees for smart contract networks.
Highlights from the January 31st report include:
- Bitcoin to reach $1 million per coin by 2030
- Smart contract networks could drive $450 billion in annual fees by 2030
- Expansion and diversification of smart contract network utility
- Neural networks and AI will meld with other technologies such as cryptocurrencies to usher in a new world
ARK’s overall investment theme is based on five converging technological innovations that will transform in the coming years: public blockchain, artificial intelligence, energy storage, robotics and multi-omics sequencing.
Each of these falls into multiple sectors, industries and activities, and ARK hopes to tap into the economic potential of the investment vehicle.
“Neural networks are the most important catalysts”
The establishment of property rights is expected to increase the value of digital assets in the coming years, according to a report by ARK Invest. Historically, physical and intellectual property rights have shown a positive relationship with her GDP per capita, commonly used as a measure of living standards. Digital assets with decentralized proof of ownership could drive an increase in per capita online spending. ARK predicts that his NFT trading volume worldwide will more than quintuple, surging from his current $22 billion to $120 billion by 2027.
By onboarding billions of consumers and millions of merchants, digital wallets are poised to disrupt traditional banking by saving nearly $50 billion in payment transaction costs. ARK predicts that with 3.2 billion users, digital wallets reach 40% of the world’s population. According to ARK research, the number of digital wallet users is expected to grow at an annual rate of 8%, reaching 65% of the global population by 2030.
“We believe the long-term opportunity for Bitcoin is strengthening. […]Its network foundation has been strengthened and its owner base has become more long-term. Contagion caused by centralized counterparties has increased Bitcoin’s value proposition, including decentralization, auditability, and transparency. The price of 1 Bitcoin could exceed $1 million in the next decade. “
Bitcoin investors are more focused on long-term investments than ever before, according to ARK. Despite market fears fueled by the failures of several major crypto organizations, on-chain data suggests Bitcoin holders remain unwavering in their commitment to long-term prospects.
Institutional investors remained bullish through 2022 despite major scandals and disruptions rippling across the industry. highlight:
- Black Rock: In June 2022, Aladdin by BlackRock partnered with Coinbase Prime to give institutional investors direct access to Bitcoin and other cryptocurrencies. This collaboration has the potential to bring trillions of dollars to the crypto asset class over the next few years.
- BNY Melon: In October 2022, BNY Mellon launched a cryptocurrency custody platform to protect assets for institutional investors. The company manages more than 20% of the world’s investable assets, so it could potentially use Bitcoin to efficiently expand its financial services.
- Eaglebrook Advisor: In October 2022, Eaglebrook Advisors and ARK Investment Management will join forces to give financial advisors access to actively managed crypto strategies, including direct crypto ownership, low investment minimums and seamless portfolio report integration. provided.
- fidelity: In November 2022, Fidelity officially launched Bitcoin and Ether retail trading accounts, allowing investors to trade and securely hold these assets on the platform.
“Bitcoin is likely to expand into a multi-trillion dollar market.”
ARK research finds that as the value of financial assets tokenized on the blockchain increases, decentralized applications and the smart contract networks that support them will earn $450 billion in annual revenue by 2030, with a market value of We predict it could reach $5.3 trillion.
“The utility of smart contract networks is expanding and diversifying.”
According to the report, traders are opting for self-custody solutions and away from centralized intermediaries as they increasingly prefer the transparency offered by decentralized exchanges. Since 2020, decentralized exchange (DEX) trading volume has increased as a percentage of total cryptocurrency trading volume, although CEX still dominates the majority of the market, although the report notes that DEX expected to become stronger.
Several cryptocurrency lending companies, such as Celsius and Voyager, have gone bankrupt, but decentralized lending markets like Arb have continued to operate. These markets continued to process deposits, withdrawals, originations and clearings without service interruption. From November 2020 to date, Aave has processed over $75 billion in inflows and over $66 billion in outflows, all through automated smart contracts.
The transformation of the Ethereum network entered a new phase with the September 2022 merger, marking the transition from Proof of Work (PoW) to Proof of Stake (PoS). With this change, Ethereum eliminated the need for energy-intensive mining to secure the network, thereby improving monetary policy and reducing new token issuance. With this new token model, Ethereum’s net annual token issuance has remained flat, lower than Bitcoin’s 1.7% and lower than Ethereum’s previous PoW model of 4%. Ether supply is expected to decline in the coming years as a result of a stable network. This is shown by ARK in terms of projected supply growth after the merge.
Ethereum’s Layer 2 scaling solution appears to improve network activity. In 2022, two widely used layer 2 networks, Arbitrum and Optimism, will reach the same level of transactions as the base layer of Ethereum. Additionally, the number of active addresses in each network increased significantly, 11x for Arbitrum and 19x for Optimism.
The share of some Layer 1 networks in the token supply remains a cause for concern. Layer 1 blockchains have an increasing proportion of token supply controlled by insiders such as founding teams, individual investors, private foundations and funds. This trend is due to founders amassing more reserves to compete with established players, as well as increased investment from venture capital in base layer protocols. Additionally, regulatory considerations have reduced the use of Initials his coin offering as a vehicle for open distribution, he notes ARK.
“Smart contract networks could drive $450 billion in annual fees by 2030.”
Following the collapse of centralized crypto intermediaries over the past year, decentralized public blockchains with self-executing contracts offer a more transparent and non-custodial solution for financial services. Decentralization is becoming a key factor in maintaining the original purpose of public blockchain infrastructure. As the value of tokenized financial assets increases on the blockchain, decentralized applications and the smart contract networks that power them will generate $450 billion in annual revenue and become the market leader by 2030, according to ARK research. Value could reach $5.3 trillion.