This model breaks down the value of BTC into six major sectors, estimating and summing them up (it’s not just random shouting).

Original text: David Puell, Ark Invest analyst;

Translator: CryptoLeo

Editor’s Note:

At the beginning of the year, Bitcoin's "dead bulls" and Cathie Wood's Ark Invest released the Big Ideas 2025 report, mentioning three price targets for Bitcoin by 2030: $300,000 (bear market), $710,000 (baseline market), and $1.5 million (bull market). At that time, it was merely a "wild shout" of a price far exceeding market expectations (like Plan B), without disclosing the actual estimation process.

Two months later, Ark Invest finally revealed its modeling method and logical assumptions for Bitcoin's 2030 price targets. This model predicts Bitcoin's price in 2023 based on the total potential market size (TAM) and penetration rate (degree of adoption or market share).

Even more encouraging (exaggerated) is that under the calculations based on Bitcoin's active supply metrics created by Ark Invest, Bitcoin's price in 2030 is projected to be: $500,000 (bear market), $1.2 million (baseline market), and $2.4 million (bull market). If any of the TAM or penetration rates fall short of expectations, Bitcoin may not reach these price targets. Therefore, this model also carries some risks and biases. Below are the specific details of Bitcoin price predictions, compiled by Odaily Planet Daily.

Price Targets and Assumptions

Our price targets are the sum of contributions from TAM (total potential market) by the end of 2030, based on the following formula:

Odaily Planet Daily Note: This formula predicts Bitcoin's price in 2030 by quantifying the dynamic relationship between market demand and Bitcoin circulation. The price of Bitcoin is derived by multiplying the maximum dollar benchmark demand size of segmented markets by Bitcoin's penetration rate in those markets and dividing by Bitcoin's circulating supply, summing the prices of all segmented markets (the following segmented markets/concepts) to arrive at the predicted price of Bitcoin in 2030.

Our estimate of the supply is based on Bitcoin's circulating supply, which will approach 21 million BTC mined by 2030. The contribution of each variable to the price target is as follows:

Expected Contributors to Capital Accumulation (Primary):

1. Institutional investment, primarily through spot ETFs;
2. Bitcoin is referred to by some as "digital gold," which is a more flexible and transparent store of value compared to gold;
3. Emerging market investors seeking a safe haven to protect themselves from inflation and currency devaluation.

Expected Contributors to Capital Accumulation (Secondary):

4. National treasury reserves, with other countries following the U.S. to establish Bitcoin strategic reserves;
5. Corporate treasury reserves, as more companies utilize Bitcoin for cash diversification;
6. On-chain financial services for Bitcoin, positioning Bitcoin as an alternative to traditional finance.

Excluding digital gold (as it is Bitcoin's most direct zero-sum competitor, thus our model excludes it), we conservatively assume that the TAM of the above contributors (specifically 1, 3, 4, and 5) will grow at a compound annual growth rate (CAGR) of 3% over the next six years. For the sixth contributor—on-chain financial services for Bitcoin—we assume a CAGR between 20% and 60% over six years, based on the cumulative value as of the end of 2024, as shown below:

Odaily Planet Daily Note: This formula calculates Bitcoin's TAM six years later based on the total value of Bitcoin in 2024 and each year's compound growth rate, dividing by Bitcoin's circulating supply in 2030 to calculate its price.

Finally, we describe the contributions of TAM and penetration rates to the price targets in bear, baseline, and bull markets as follows:

As shown in the figure above, "digital gold" contributes the most to our bear and baseline scenarios, while institutional investment contributes the most to our bull scenario. Interestingly, national treasury, corporate treasury, and on-chain financial services for Bitcoin have relatively small contributions in each scenario. In the table below, we detail the relative contributions of our predicted six sources of capital accumulation to the bear, baseline, and bull scenarios:

Odaily Planet Daily Note: The following charts show the expected TAM for segmented markets in 2030, Bitcoin penetration rates under three market conditions, and the contribution ratios in the figure above.

1. Potential Contributors to Capital Accumulation: Institutional Investment

According to State Street Bank, the definition of the global market portfolio is as follows:

The market value of all investable capital assets divided by the total market value of all assets. As the sum of all holdings generated by collective decisions of investors and issuers, as well as capital suppliers and demanders, the global market portfolio can be seen as a practical representation of the investable opportunity set for all global investors.

As of 2024, the TAM of the global portfolio is approximately $169 trillion (excluding gold's 3.6% share). Assuming a CAGR of 3%, its value will reach about $200 trillion by 2030.

We assume penetration rates of 1% and 2.5% for the bear and baseline markets, respectively, both lower than gold's current 3.6% share. Thus, the bear and baseline markets represent a conservative view of Bitcoin adoption. In a more aggressive bull market, we assume Bitcoin's penetration rate reaches 6.5%, nearly double gold's current share.

2. Potential Contributors to Capital Accumulation: Digital Gold

The contribution of digital gold assumes the ratio of TAM relative to gold's current market value. Given the positive penetration rates provided, we assume that gold's expected TAM will not grow by 2030, thereby lowering its expected value. We believe that Bitcoin as digital gold is an attractive narrative that will drive its penetration rate.

3. Potential Contributors to Capital Accumulation: Emerging Market Safe Haven

The TAM for emerging market safe havens is based on the monetary base of all developing countries (defined by the IMF/CIA, also referred to as "underdeveloped" economies). We believe this use case for Bitcoin has the greatest potential for capital appreciation. In addition to its value storage characteristics, Bitcoin's low barrier to entry provides individuals with internet access an investment option that may yield capital appreciation over time, unlike defensive allocations such as the dollar—thus maintaining purchasing power and avoiding domestic currency devaluation.

Odaily Planet Daily Note: "M2" is a measure of the money supply in the U.S., including M1 (currency and deposits held by the non-bank public, checkable deposits, and traveler's checks) plus savings deposits (including money market deposit accounts), small time deposits under $100,000, and retail money market mutual fund shares.

4. Potential Contributors to Capital Accumulation: National Treasury

While El Salvador and Bhutan currently lead the world in national-level Bitcoin adoption, the number of advocates for Bitcoin strategic reserves is increasing—especially after Trump took office, issuing an executive order on March 6 requiring the establishment of BTC reserves in the U.S. Although our bear and baseline assumptions are relatively conservative, we believe that the U.S. situation may further validate our bull market assumption of a 7% penetration rate.

5. Potential Contributors to Capital Accumulation: Corporate Treasury

Inspired by MicroStrategy's successful acquisition of Bitcoin since 2020, other companies have also begun to include Bitcoin in their corporate treasury reserves. As of the end of 2024, 74 publicly traded companies hold approximately $55 billion in Bitcoin on their balance sheets. If these corporate BTC strategies are validated in the next six years, our conservative penetration rate assumptions in the bear and baseline scenarios (1% and 2.5%, respectively) may ultimately approach the 10% under the bull market assumption.

6. Potential Contributors to Capital Accumulation: On-chain Financial Services for Bitcoin

Bitcoin's native financial services are emerging as new contributors to capital accumulation. Notable examples include Layer 2 services like the Lightning Network, which aim to expand Bitcoin's transaction capacity, and Wrapped BTC (WBTC) on the Ethereum network, which allows Bitcoin to participate in decentralized finance. Such on-chain financial services are becoming increasingly important features of the Bitcoin ecosystem. Therefore, we believe that a 40% compound annual growth rate (CAGR) for the baseline market from now until 2030 is based on realistic expectations.

ARK's Assumptions Apply to Active Bitcoin Supply

Although not included in ARK's Big Ideas 2025 report, other experimental modeling methods estimate Bitcoin's price in 2030. One such method calculates the liquidity supply of Bitcoin by accounting for lost or long-held Bitcoin, utilizing Bitcoin's on-chain transparency—we refer to this as "active" supply.

Using this method, the active supply can be calculated by multiplying the expected supply of Bitcoin in 2030 by an "activity" metric that measures the movement of Bitcoin over time from 0% to 100%—in other words, the true "float" of the asset, as shown below.

As illustrated, Bitcoin's network activity has remained around 60% since early 2018. We believe this level of activity indicates that about 40% of the supply is "vaulted" (i.e., Bitcoin stored and not entering the market, such as Satoshi's Bitcoin addresses)—a concept we explore in depth in ARK's white paper "Cointime Economics: A New Framework for On-Chain Analysis of Bitcoin" (https://www.ark-invest.com/white-papers/cointime-economics).

We then apply the same TAM and penetration rates under bear and baseline market scenarios to the expected active supply reaching 60% by 2030 (assuming activity remains stable over time), as shown below:

Based on this, we derive the following price targets, which are approximately 40% higher than our base model that does not consider Bitcoin's active supply and network activity:

This model indicates that the estimated price of BTC in 2030, based on the new active supply metrics, is: $500,000 (bear market), $1.2 million (baseline market), and $2.4 million (bull market).

Importantly, valuations constructed using this more experimental approach are more aggressive than those we have for bear, baseline, and bull market scenarios. Since our official price targets lean towards conservatism, they focus solely on Bitcoin's total supply. Even so, we believe this more experimental approach highlights Bitcoin's scarcity and the loss of supply that is not reflected in most current valuation models.

Appendix

I briefly reviewed the Cointime Economics framework, which proposes a new system for analyzing Bitcoin's valuation and inflation rates by calculating the economic state and supply activity of Bitcoin through its Liveliness and Vaultedness. This can measure the transaction activity and the proportion of unused coins in the Bitcoin network. Using these two metrics, Bitcoin's supply can be classified into active supply and unused supply.

The framework also introduces a unit of measurement called "Coinblock," which provides a new set of on-chain analytical metrics to measure Bitcoin's activity by calculating the product of holding time and the amount of Bitcoin to derive the number of coinblocks. It also introduces the concepts of "coinblock creation," "coinblock destruction," and "coinblock storage," and based on this, constructs a series of new economic indicators, such as Bitcoin's activity and locked-in degree, to measure the dynamic changes and economic state of the Bitcoin market. Additionally, the content showcases the potential of Cointime Economics in improving market valuation models, measuring supply activity, and creating new models through case studies. The concept of coinblocks and the Cointime economic framework may become major references for Bitcoin valuation in the future. Interested parties can check out the original PDF (https://assets.arkinvest.com/media-8e522a83-1b23-4d58-a202-792712f8d2d3/c919760f-ddc5-4c7c-a653-7904c0f78ddf/ARK%20Invest%20x%20GlassnodeWhite%20PaperCointime%20Economics_Final.pdf).

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