For Bitcoin (BTC 7.36%) investors, 2025 hasn’t started off the way it was supposed to. Instead of skyrocketing in price, Bitcoin has dipped below $90,000, and is now trading at a three-month low. Much of the pro-crypto euphoria at the start of the year has now faded, as investors are having second thoughts about putting their money into risky assets.
Despite this surprising turn of events, Cathie Wood of Ark Invest continues to double down on her bold Bitcoin predictions. She currently thinks Bitcoin could hit a price of $1.5 million by 2030, and remains undeterred by the recent downturn in the crypto market.
So is she right?
Bitcoin’s performance in 2025
Let’s not sugarcoat things: If you started buying Bitcoin in 2025, you’ve probably lost money on your investment. Bitcoin is now down 5% for the year, and 20% since the presidential inauguration on Jan. 20. At this point, you might be seriously second-guessing your decision to invest in crypto. Just about any new piece of macroeconomic news seems to send Bitcoin lower, and the day-to-day volatility may be a bit too much to stomach.
And that’s exactly what’s supposed to happen. In order for Bitcoin to head significantly higher, it will require all the short-term, low-conviction buyers to be replaced with long-term, high-conviction buyers. In recent commentary, Cathie Wood emphasized that this process is extremely healthy for the market: “We would not want the market to continue straight up to the right without looking back. We want a wall of worry.”
This perspective is based on a rigorous analysis of Bitcoin’s historical track record. As Cathie Wood has pointed out before in her firm’s annual research reports, Bitcoin has outperformed every other major asset class over long-enough time horizons. Moreover, each time Bitcoin has collapsed in value, it has bounced back stronger than before, to hit a new all-time high. As a result, long-term, high-conviction buyers are largely unfazed by Bitcoin’s performance in 2025.
A new era of institutional buying
If that’s not enough to change your perception of Bitcoin, consider the fact that institutional investors are now starting to ramp up their exposure to Bitcoin. Thanks to the introduction of the new spot Bitcoin ETFs last January, they now have an easy, convenient way to get exposure to Bitcoin.
As Cathie Wood notes, we’re still in the early stages now, and there’s plenty more institutional money ready to flow into Bitcoin. Right now, institutions are typically only allocating 1% to 2% of their portfolios to Bitcoin. Wait until that number steadily trends upward over time. Billionaire Paul Tudor Jones, for example, now has 4.5% of his hedge fund portfolio in a single spot Bitcoin ETF.
Image source: Getty Images.
From the perspective of institutional buying, the past quarter was extremely bullish for Bitcoin. The amount of money invested by large institutional investors (those with more than $100 million in assets under management) in Bitcoin tripled, to reach a new high of $38.7 billion. There are now over 1,000 large institutional investors with exposure to Bitcoin via the spot ETFs.
Many of these are hedge funds and Wall Street investment banks willing to take on more risk. But over time, the list of institutional investors buying Bitcoin will include risk-averse pension funds and endowments. That’s when you’ll know that we’ve moved from the “early” stages to the “middle” and “late” stages of Bitcoin accumulation.
In search of a new catalyst
Last year, Bitcoin had two primary catalysts: the launch of the spot Bitcoin ETFs and the election of a pro-crypto president in November. Together, they helped Bitcoin soar 125% last year, making it the best-performing asset class in the world.
But what about this year? The big catalyst could be the creation of a strategic Bitcoin reserve by the U.S. government. While the details are still being worked out, the current plan is to buy 1 million Bitcoins over a five-year period. That’s equivalent to 5% of the entire circulating supply of Bitcoin.
Even better, other nations might join in, creating a Bitcoin buying frenzy on a global scale. That scale of new buying is almost certain to push Bitcoin to new highs.
What is the long-term outlook for Bitcoin?
It’s important to maintain a long-term outlook when it comes to Bitcoin. Right now, Cathie Wood projects that Bitcoin will grow at a compound annual growth rate (CAGR) of 58% over the next five years. If Bitcoin can do that, then it can reach a $1.5 million price tag by the end of 2030.
Given that Bitcoin delivered returns of 150% to investors in 2023 and another 125% in 2024, 58% appears to be a number that is well within the cryptocurrency’s reach. For that reason, the current period of market uncertainty could be a unique opportunity to buy Bitcoin at a temporarily discounted price.
