1 Popular Cryptocurrency Cathie Wood of Ark Invest Sees Soaring in Value by 1,490%

Cathie Wood, founder and CEO of Ark Invest, has been an outspoken proponent of Bitcoin (CRYPTO: BTC) for many years. Investors who follow Wood can gain exposure to Bitcoin through her company's ARK 21Shares Bitcoin ETF (NYSEMKT: ARKB), and her latest estimates of where the cryptocurrency will be in just five years are bullish, to say the least.

Wood said earlier this year that the base case for Bitcoin's price is $750,000 and its bull case could see it rising to $1.25 million.

With one Bitcoin worth about $78,442 as of this writing, Wood's bull case would see Bitcoin rising a staggering 1,490% over the next five years.

Here's why Wood is so optimistic about Bitcoin's rise -- and why she's probably overestimating where it's headed.

Ark Invest CEO Cathie Wood. Image source: Getty Images.

Why Cathie Wood thinks Bitcoin could reach $1.25 million

In a Fox News interview back in April, Wood highlighted a handful of catalysts that will push Bitcoin higher. And one of the most important drivers of its price, according to her, is continued institutional adoption.

She said that institutions are increasingly adding Bitcoin to their portfolios and that, as they continue to do so, it will help boost the cryptocurrency's price. She's not wrong that Bitcoin has gained widespread popularity among financial institutions. Since spot Bitcoin ETFs were launched in 2024, they collectively have $102 billion in assets under management.

More financial institutions could adopt Bitcoin investing in the future, too. The CLARITY Act is currently under consideration in Congress and would create a clear federal regulatory framework for cryptocurrencies. If it passes, it could convince even more financial institutions to give their customers access to buying and selling Bitcoin, which could drive its price higher.

Wood also believes that a generational wealth transfer and more investors using Bitcoin as a substitute for gold will drive its value up. She said that as younger people inherit wealth in the coming years, they'll be more inclined to put some of it into Bitcoin and other digital assets.

Is Bitcoin at $1.25 million realistic?

In a word, no.

For one, Bitcoin's value has increased over the past several years because of the launch of Bitcoin ETFs. But much of that momentum has already run its course. It's already easy for investors to buy and sell crypto through ETFs, so even if the CLARITY Act passes and more financial institutions dip their toes into Bitcoin, it's unlikely to create enough momentum to significantly increase its value.

I also think there's a shift in investor perspectives right now, as people realize they can earn significant returns by investing in highly profitable AI stocks -- without the risks associated with cryptocurrencies.

As long as AI stocks are booming and tech companies are delivering impressive profits, there's less incentive to invest in Bitcoin and other cryptos that don't have real products or services, don't have earnings, and carry far more risk.

I don't think investors should avoid Bitcoin, especially if they want to diversify their portfolios. But expecting its value to soar 1,490% over the next five years just doesn't seem realistic.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.