ARK Invest Has Significantly Revised Its Long-Term Outlook for Bitcoin

output:input: Bitcoin has a bull case price target of approximately $2.4 million by 2030. The report lays out a comprehensive modeling framework based on Bitcoin's total addressable market (TAM) potential

Ark Invest has significantly revised its long-term price target for Bitcoin (BTC), now projecting a bull case price of approximately $2.4 million by 2030. The updated target, which was previously $1.5 million, is based on an updated analysis of Bitcoin’s total addressable market (TAM) potential, institutional and emerging market adoption trends, and assumptions around supply dynamics.

According to Ark’s report, which was updated on Tuesday, a 6.5% penetration of the $200 trillion global market portfolio ex-gold by 2030 will contribute the most to its bull case price target.

This share is nearly double the current allocation to gold, and by 2030, around 207 institutions will hold bitcoin, an updated analysis claims, compared to the prior 170. The firm’s base and bear case price targets are $1.2 million (CAGR ~53%) and $500,000 (CAGR ~32%), respectively.

The updated price target represents a compound annual growth rate (CAGR) of ~72% between December 31, 2024 and December 32, 2030.

Its analysis also considers several other Bitcoin use cases and demand trends, including:

Emerging market demand: “In our view, this bitcoin use case has the greatest potential for capital accrual.”suggesting that the asset’s ability to protect wealth from inflation and devaluation in developing economies. This segment could account for 13.5% of the $2.4 million valuation, assuming a 6% TAM penetration rate of emerging market monetary bases.

Its analysis also considers several other Bitcoin use cases and demand trends, including:

Emerging market demand: “In our view, this bitcoin use case has the greatest potential for capital accrual.”suggesting that the asset’s ability to hedge inflation and currency weakness in developing economies. This segment could account for 13.5% of the $2.4 million valuation, assuming a 6% TAM penetration rate of emerging market monetary bases.

Each use case’s contribution to bitcoin’s total value will depend on several factors, including the rate of integration, which Ark said it assumes will be incremental.

“We prefer this approach because it better reflects how new technologies are adopted over time. As a result, we project that the gains will be modest early on but increase at an accelerating rate in later years,” the investment firm stated.

Its analysis began with the core premise that Bitcoin’s scarcity will drive its value.

“We start with the simple proposition that scarcity drives value. In essence, as supply is limited, increasing demand will bid up prices. In the case of bitcoin, its scarcity is defined by 21 million coins and the fact that a portion of the issued supply is lost forever due to inactivity or negligence,” the firm stated.

In a supplemental analysis, Ark also applied these assumptions to Bitcoin’s “active” supply, a methodology that discounts long-held or lost coins.

According to its analysis, if one applies a liveliness-adjusted supply basis (which considers coins that haven’t moved in the past year and are likely lost or inactive) to its bull case assumptions, then the price target rises to $2.4 million, up from the originally stated $1.5 million.

“Most valuation models today do not reflect bitcoin’s scarcity and lost supply, which we believe could provide further upside potential to our bull case price target,” Ark concluded.