Artificial intelligence has dominated Wall Street this year, with Nvidia leading the charge in machine learning processors. However, a new opportunity is emerging around Bitcoin, fueled by the approval of spot Bitcoin ETFs.
Bernstein analysts Gautam Chhugani and Mahika Sapra project Bitcoin could hit $200,000 by 2025, $500,000 by 2029, and $1 million by 2030, a potential 1,415% increase from its current price of $66,000.
Cathie Wood of Ark Invest has an even bolder prediction: Bitcoin will reach $3.8 million by 2030, implying a staggering 5,655% upside.
Amid this bullish outlook, several top hedge fund managers have reallocated their investments. Ken Griffin of Citadel Advisors, David Shaw of D.E. Shaw, and Israel Englander of Millennium Management have significantly reduced their Nvidia stakes while initiating positions in the iShares Bitcoin Trust, a newly approved spot Bitcoin ETF.
Griffin sold 2.4 million Nvidia shares, reducing his stake by 68%, while starting a small position in the iShares Bitcoin Trust. Shaw cut his Nvidia holdings by 38%, selling 1.4 million shares, and also bought into the Bitcoin ETF. Englander reduced his Nvidia stake by 35%, selling 720,004 shares, and made the iShares Bitcoin Trust his twelfth-largest holding.
This strategic shift underscores the growing appeal of Bitcoin and the potential of spot Bitcoin ETFs. Unlike Nvidia, which remains a strong business investment, the diversification into Bitcoin ETFs highlights a new frontier for savvy investors.
Spot Bitcoin ETFs are transforming the investment landscape by simplifying access to Bitcoin. These ETFs hold the cryptocurrency as the underlying asset, eliminating the need for separate crypto exchange accounts and simplifying tax reporting. They are also cost-effective, with the iShares Bitcoin Trust charging an expense ratio of 0.25%, compared to higher transaction fees on platforms like Coinbase.
Bernstein and Ark Invest believe institutional demand will drive Bitcoin’s future growth. Recent SEC filings reveal that major hedge funds and investment banks, including JPMorgan Chase, Morgan Stanley, and Wells Fargo, are acquiring positions in spot Bitcoin ETFs.
While current institutional investments are small, Bernstein analysts anticipate that as liquidity improves, these positions will grow. Cathie Wood forecasts institutions will eventually allocate over 5% of their portfolios to Bitcoin ETFs, potentially pushing Bitcoin’s price to $3.8 million.
Historically, Bitcoin’s price has surged following halving events, which reduced the block subsidies miners receive by 50%. The latest halving in April 2024 has set the stage for another price rally, with past trends indicating a new peak 12 to 18 months post-halving.
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