The Bitcoin (BTC) price could be headed a lot higher as more companies allocate a portion of their treasuries to the digital asset, according to new research from ARK Invest.
In its annual Big Ideas report, ARK said Bitcoin’s price would increase by roughly $40,000 if “all S&P 500 companies were to allocate 1% of their cash” to BTC. This scenario isn’t entirely unrealistic as support for the BTC network continues to grow.
According to the report:
“Based on search volumes compared to 2017, bitcoin’s price increase seems to be driven less by hype. With bitcoin appearing to gain more trust, some companies are considering it as cash on their balance sheets.”
At current values, a $40,000 gain would put Bitcoin’s price in the vicinity of $73,000.
If S&P 500 companies allocated 10% of their cash reserves to BTC, the digital currency’s price could increase by $400,000, ARK said.
The influx of institutional and corporate buyers adds to the strong hands that currently make up the Bitcoin market. Industry data consistently shows that more than 60% of Bitcoin’s circulating supply hasn’t moved in a year, underscoring the conviction of long-term holders.
MicroStrategy, which isn’t part of the S&P 500, has led corporate America’s push into Bitcoin. The data analytics firm has accumulated nearly 71,000 BTC at a basis price of over $1.1 billion. Its holdings are currently worth roughly $2.4 billion.
MicroStrategy and payment company Square “are showing the way for public companies to deploy bitcoin as a legitimate alternative to cash,” ARK said.
As of today, corporate adoption remains extremely limited compared with the number of publicly-traded U.S. companies. At last check, there were less than two-dozen publicly-listed entities holding BTC on their books.