Cathie Woods’ ARK Invest has predicted that Ether’s (ETH/USD) market capitalization will hit or even surpass $20 trillion. The asset management company, which has $12.43 billion (£9.26 billion) in AUM, made this forecast in its Big Ideas 2022 report published on January 26.
For this prediction to pass, ETH would have to trade between $170,000.00 (£126,661.05) and $180,000.00 (£134,111.70).
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At the moment, ETH is the second-largest cryptocurrency after Bitcoin (BTC/USD), with a market cap of $288,122,381,474.00 (£214,623,802,571.80). The company bases its ETH prediction on how fast the cryptocurrency’s network has grown in efficiency and utility. In the report, ARK Invest said much of ETH’s growth has come from Decentralized Finance (DeFi).
Touting the DeFi space, the company said,
Decentralized Finance promises more interoperability, transparency, and financial services while minimizing intermediary fees and counterparty risk.
Per ARK Invest, smart contracts and decentralized apps (dApps) on Ethereum are taking over traditional financial functions. The company pointed out that Ethereum-based smart contracts host banking and lending, exchanges, brokerages, asset management, insurance, and derivatives.
Additionally, the company claims DeFi outperformed traditional finance over the past 12 months regarding revenue per employee, with DeFi employees netting $88.00 million (£65.61 million) compared to $8.00 million (£5.96 million) for traditional finance employees.
BTC to surge to $1.36 million per coin
According to ARK Invest, BTC will also surge tremendously by the end of this decade. The company believes the flagship cryptocurrency will trade as high as $1.36 million (£1.01 million) with a market cap of $28.50 trillion (£21.24 trillion). To reach this conclusion, the firm assigned an estimated future value to eight of BTC’s use cases.
Apart from the price change, ARK Invest expects BTC to account for 50% of global remittances at a velocity of 1.5x.
The company also believes BTC will also account for 10% of emerging markets’ currency, 25% of US bank settlement volumes, 1% of nation-state treasuries worldwide, 5% of global high net worth individual (HNWI) wealth, 2.55% of institutional asset base, 5% of the cash from S&P 500 companies, and half of gold’s total market cap.
On top of this, ARK Invest believes BTC mining could revolutionize energy production by fostering the generation of more electricity from renewable, carbon-free sources.
This news comes as BTC and ETH continue performing poorly despite attempting a comeback earlier this week. At the time of writing, BTC is changing hands at $36,046.13 (£26,868.97) after losing 4.20% over the past 24 hours. On the other hand, ETH is trading at $2,404.28 (£1,792.07) after losing 3.31% in the day.
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