Cathie Wood, CEO and Chief Investment Officer of ARK Invest, recently reaffirmed that the Bitcoin price target of $1.5 million for the bull case remains intact. The executive highlights that, following the end of the US government shutdown, an imminent shift in macroeconomic conditions is expected to favor risk assets. Wood underscores that the current liquidity squeeze is set to reverse soon.
According to data presented by the investment management firm, about $70 billion has already returned to the markets since the government reopening. Likewise, it is projected that another $300 billion dollars will enter the financial system over the next five to six weeks as the Treasury General Account normalizes.
Additionally, a crucial catalyst is expected on December 1, the date on which the Federal Reserve could end its quantitative tightening program. Therefore, the shift towards a quantitative easing policy would reduce borrowing costs and stimulate economic activity, alleviating pressure on the crypto and artificial intelligence sectors.
Can the Liquidity Injection Detonate the Next Great Bull Market?
Despite the recent market correction and the rise of stablecoins, the firm’s long-term investment thesis remains optimistic. Wood explained during a webinar that, although stablecoins have taken on some prominence as a haven, the gold price appreciation has been far greater than expected initially by the company. In this sense, ARK maintains its bull scenario for 2030, which places the main cryptocurrency at a millionaire valuation, while its bear scenario contemplates a price of $300,000. Thus, the analysis suggests that current conditions are building a solid foundation to reverse the recent drawdowns observed on the charts.
The improvement in financial conditions could trigger a significant recovery in digital asset prices towards the end of the year. On the other hand, analysts like Arthur Hayes, co-founder of BitMEX, agree that a Federal Reserve pivot could boost Bitcoin towards $250,000 if bond-buying is reactivated. However, to confirm a sustainable trend, the market needs to reclaim key technical levels. Experts from the Nexo platform warn that Bitcoin needs to reclaim the $92,000 level to open the door to a broader recovery if macro conditions align favorably.
The outlook for the end of the year looks promising if liquidity injections and the shift in US monetary policy materialize. Investors will need to closely watch the Fed’s decisions in December, as the alignment of macroeconomic factors will be decisive to validate the long-term Bitcoin price target proposed by ARK. Thus, the coming weeks will be critical to define if the market finally enters an aggressive and lasting expansion phase.
