Speaking to CNBC on Dec. 9, Ark CEO Cathie Wood said that crypto is a diminutive amount of institutional portfolios, and “institutions are moving in” on Bitcoin and its brethren.
She asserted that cryptocurrencies are a new asset class with a “correlation very different compared to other asset classes,” and only real estate comes close. She added:
“Institutional managers have to look at new asset classes that are evolving that have low correlations. That’s key to diversification and the Holy Grail in terms of asset allocation.”
She then said that if institutions made the move into BTC by allocating around 5% to their portfolios over time, it could add $500,000 to the price of the asset.
Some large investors such as business intelligence, mobile software, and cloud services firm MicroStrategy are already increasing their allocations.
On Dec. 9, the company headed by Michael Saylor purchased an additional 1,434 BTC for around $82.4 million in cash. MicroStrategy is top of the leaderboard for corporations that have invested in Bitcoin. It currently owns 122,477 BTC worth an estimated $5.9 billion at current prices.
Tesla comes in second place according to BitcoinTreasuries, with a Bitcoin stash of 43,200 coins worth around $2 billion. Jack Dorsey’s Square, which is now called Block, is the third-largest corporate holder of the asset with 8,027 coins.
Grayscale – the largest crypto fund in the world – currently has $46.6 billion in assets under management, according to its Dec. 10 update. The lion’s share of this fund, around 68%, is in its BTC trust.
El Salvador has also been buying the dip, with President Nayib Bukele loading another 150 BTC on Dec. 4.
Markets may be correcting at the moment, but the narrative is still bullish, and Cathie Wood could be on to something if more institutional and corporate investors start seeking to hedge with crypto.
Bitcoin prices have retreated again today, falling a further 4% to around $47,800 at the time of writing, according to CoinGecko.
The asset was situated at $58,000 less than a week ago before it crumbled by $16,000 in hours. After bouncing off from the two-month low at $42,000, bitcoin is still unable to recover most losses as it fails to break above the coveted $50,000 mark.
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