1 Top Cryptocurrency to Buy Before It Soars 2,377%, According to Cathie Wood of Ark Invest

Cathie Wood isn't known for playing things safe. As the maverick head of Ark Invest and pioneer of thematic investing, she's used to making big bets -- and even bigger claims. She continues to be a huge advocate of Tesla, standing by the struggling electric vehicle maker with the belief that it will capture $5 trillion of a future $10 trillion robotaxi market.

She is also a staunch advocate of cryptocurrencies and a big believer in Bitcoin (CRYPTO: BTC), the granddaddy of them all. Her prediction here? By 2030, Bitcoin will reach $1.5 million a coin, a nearly 2,400% return from today's price. She went even further more recently, saying that if institutional investors allocate 5% of their funds to Bitcoin, it would add $2.3 million to her prediction for a total of $3.8 million per coin. What leads her to believe this?

Institutions will make all the difference for Bitcoin

Bitcoin is no longer the wild West of investing. It is still a volatile asset, that's for sure, but the market is very different from just a decade ago. In the last few years, there has been a massive influx of institutional money, and with that capital has come more stability. Wood herself helped spur the change.

Although a few institutions have been in the market for some time, many more have gotten involved since Wood helped lobby the Securities and Exchange Commission to approve spot Bitcoin exchange-traded funds (ETFs). The first batch of 11 such ETfs was approved in January of this year. This was a big moment for the industry, as these ETFs provide a much easier way for investors large and small to access Bitcoin. Many brokerages that don't provide cryptocurrency trades will gladly support the trading of spot Bitcoin ETFs.

Wood believes that as people start thinking of Bitcoin not as a risky, volatile asset but as a stable and even safe one, institutional investors will shift even more of their portfolios into this cryptocurrency.

Right now, most of the largest financial institutions have less than 1% of their portfolios in "digital assets" and 16% have less than 0.1% (0 wasn't an option in the survey). Still, adoption is continuing. A modest exposure by institutional investors, say 1% or 2%, would still boost Bitcoin's price significantly, especially if some of her other catalysts come to pass.

Adoption as digital gold

This evolving image from speculative asset to something more stable has led some to refer to Bitcoin as "digital gold." It is scarce, it takes work to "mine," and its supply is finite. Taken together, all of that means that it has a tendency to appreciate in value over time.

These qualities and more led Larry Fink, one of the most influential and powerful investors in the world, to call Bitcoin a "legitimate financial instrument." He believes it is an excellent asset if you "believe governments are debasing their currency."

Unlike gold, however, Bitcoin is portable and easy to store. Do you know how difficult it is to send $10,000 in gold bars to someone across the country? With Bitcoin, it can be done in seconds. The value of all the gold in Fort Knox can be stored on a flash drive.

As more and more people begin seeing Bitcoin as digital gold, it could spur a massive influx of money, especially in times of economic turbulence. Wood points to other catalysts, like its use as currency in countries with runaway inflation, by governments as a store of wealth, as a remittance asset for cross-border payments, and as a cash equivalent by corporations.

It's clear there are many ways Bitcoin can appreciate in value; the question is how much it will appreciate. I think that Wood's target of $1.5 million and bull case of $3.8 million are pretty unlikely by 2030, but she definitely makes an interesting case. I believe Bitcoin will handily outperform the market over the next five years and is a great part of a diversified portfolio for those with high risk tolerance.

Should you invest $1,000 in Bitcoin right now?

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.