Simply put
- Ark Invest has pointed out several positive indicators as Bitcoin nears its record price.
- The firm sees unrealized gains, ETF inflows, and stronger support levels as optimistic signs.
- Previously, Ark predicted that Bitcoin could soar to $2.4 million per coin by 2030.
Cathie Wood’s investment company remains optimistic about Bitcoin, which has returned close to $111,814, just shy of its all-time high.
According to Ark Invest, the total realized profits, Bitcoin ETF activity, and converging key support levels are considered bullish signals for the leading cryptocurrency.
“Bitcoin is not hitting a point of irrational exuberance,” is one noteworthy takeaway from their report.
A key indicator that Bitcoin enthusiasm hasn’t peaked is the level of unrealized profits, which refer to the profits and losses compared to the asset’s on-chain cost base, as noted by Ark.
Using GlassNode data, Ark highlights that the overall profits for Bitcoin are just slightly above the average for this cycle. Historically, the report mentions, achieving three standard deviations in PNL (profit and loss) would indicate an irrational fervor.
Additionally, the report notes a rise in Bitcoin ETF flows, though it dropped from $9.2 billion in May to approximately $1.5 billion, which is less than that of Global Gold ETFs. In contrast, Bitcoin exchange products saw an increase from $2.5 billion to $5.5 billion, a remarkable rise of over 120%.
As Bitcoin’s price continues to rise, it has pushed its main support level to between $94,000 and $97,000, surpassing the previous 200-day moving average and the cost base for short-term holders.
Interestingly, while the company’s analysis leans bullish overall, their monthly report does pinpoint a drop in transaction volume and notes a ten-year low in Bitcoin core development as potential bearish signals.
“Participation in Bitcoin’s core GitHub repository dropped nearly tenfold since 2021, reaching its lowest since 2013,” the report indicates. “This decline highlights Bitcoin’s increasing perception as a fixed financial asset rather than a dynamic development platform.”
The performance of the cryptocurrency also comes amidst other neutral to bearish macro conditions, such as a noticeable uptick in home sellers relative to buyers in the U.S. The report also mentions rising supply costs coupled with a slump in auto sales as neutral market signals.
A mixed outlook for the short term doesn’t seem to deter Wood and Ark, who had previously made bullish projections about Bitcoin’s future price. In 2024, Wood forecasted that Bitcoin might reach $1 million per coin, referencing growing global demand for gold—an idea that resurfaced in their May report.
Earlier in the year, the company provided optimistic forecasts suggesting Bitcoin could hit $2.4 million per coin by 2030. This projection is based on “active supply,” which considers tokens that are not in long-term storage or permanently lost.
On the other hand, in their bear case modeling, they placed Bitcoin’s price at $500,000 by 2030. Recently, Bitcoin saw a 0.7% increase in the past 24 hours, now priced at $109,360, just shy of its all-time high.
