Erik Weijers, 2 months ago
Ark Invest released a new Big Ideas report, focusing on the disruptive potential of technologies such as AI and crypto. Bottom line: the recent price crash hasn't changed the research and investment firm's view on the growth potential of crypto. For 2030, they envision a 25 trillion-dollar market cap, a 25x from now. How is this possible?
For the crypto chapters of the report, Ark's core thesis can be summarized in an interesting introductory chart. It's the correlation between property rights in a country and GDP per capita. Remember, crypto makes property rights in online world possible. Think about it: online property rights will allow for online growth and wealth.
Let's have a look at some crypto market segments that Ark discusses.
Price may have fallen but Bitcoin’s fundamentals are stronger than in past drawdowns.
These metrics confirm for Ark that the adoption trend isn't broken. Ark sticks to its possible price target of $1 million per BTC around 2030 (with a bear target of 250 k and a bull target of 1.5 million).
According to Ark, the long-term opportunity for DeFi, and Web3 is strengthening. The problems with the traditional financial system are well-known to LiteBit readers: the opacity of traditional financial institutions has caused catastrophic financial collapses. Billions of people don't even have access to bank accounts.
But besides building a new financial system, a huge potential market for decentralized protocols is an interoperable form of online identity and reputation. It could disrupt big tech monopolies that currently own our identities, such as Facebook and Twitter.
The utility of smart contract networks is expanding and diversifying. While centralized entities like Celsius blew up, defi lending protocols such as Aave kept working just fine. Ethereum's layer 2's continue to scale and capture value. According to Ark, in 2030 smart contracts could create $5 trillion in market value.
In 2022, NFT trading volume increased 15% year-over-year, dominated NFT collectible projects like the Bored Apes. Interestingly though, according to Ark, the share of NFTs minted shifted toward utility-based projects like on-chain domain names and digital memberships. Ark considers this move away from the more speculative areas a healthy development. ARK forecasts that global NFT transaction volume will grow more than five-fold from $22 billion today to $120 billion by 2027.
Let's also look briefly at a related field: AI. Ark takes the optimistic view that it will help knowledge workers such as coders, designers, and copywriters. AI... 'should increase the productivity of knowledge workers more than 4-fold by 2030. Whereas some of us, understandably, feel threatened by AI image generators and chatbots, Ark sees them as the assembly line for knowledge workers.
Read more about different price expectations for Bitcoin for 2023, 2025 and 2030.
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