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the Bitcoin bull market is still intact. I realize we've been through what many would call a bear market and yet down 50% is a victory compared to down 85% for ants, Cathy. Yes, exactly. And we do believe that Bitcoin will will get to you know, new all-time highs. This market analysis features Cathy Wood as she shares her latest insights on the current state of the Bitcoin market.
This discussion is packed with bullish perspectives as she continues to believe we are still firmly in a bull market cycle. According to her, the bear market is already behind us. The bottom has been set and the worst-case scenario likely placed Bitcoin around $55,000. Now she suggests the path forward looks much clearer with strong upside potential ahead.
So let's dive in and hear exactly what she has to say next. I wrote a letter at the beginning of the year and in it you'll find a matrix of the correlations among asset classes and specifically trying to understand Bitcoin. Many people because we call Bitcoin digital gold, they think, "Oh, well, surely it's highly correlated to gold." It is not.
In fact, and we did the analysis from 2019 which is when real institutional interest started evolving uh a little more intensely. The correlation between gold and Bitcoin over that time has been 0.14. But if you look at the last two cycles, you'll see that gold rallied before Bitcoin did. And we think the same thing is happening now and we we monitor we monitor Bitcoin to gold and I feature it regularly in something called In the Know, which I do once a month.
And on that chart, you'll see yes, Bitcoin relative to gold has had a significant drop. But if you look at the longer-term, you'll see higher lows in terms of the very long-term trend line. So, we think that that the Bitcoin bull market is still intact. I realize we've been through what many would call a bear market, and yet down 50% is a victory compared to down 85 or 95%.
for ants, Cathy. Yes, exactly. And we do believe that Bitcoin will will get to you know, new all-time highs in this next cycle. Many people don't, but we do, and you know that we're on record saying that our base case for 2030 is 730,000. Our bull case is 1.5 million. We took a a lot of flak for or I did for saying that stablecoins had usurped some of the role of Bitcoin, which is true, certainly in emerging markets.
But what what people missed when I was making that statement was that gold was rallying. So, the store of value role of Bitcoin is also moving up. And in fact, the two cancel each other out. Actually, the the stronger the stronger move has been gold relative to Bitcoins in terms of the impact on the Bitcoin price.
So, we we think that we've Yeah, sure. We're in the bottoming out process. Uh you know, David Puell, who does our on-chain analytics, says the absolute cal- capitulation would occur, meaning uh it we may get there. I doubt it the way Bitcoin and other assets are acting. Uh but that drop-dead uh price range is in the 50 to 55,000 range.
We're seeing liquidity moves around the world. And uh many people, because the headlines are always talking about the Fed being hawkish, not wanting to ease. Well, guess what? The Fed funds rate is down a hundred 175 basis points. And yet, uh the the narrative out there is, "Oh, they're too hawkish.
They're too hawkish." They have started easing. And I think we're going to have um I think because inflation is going to surprise dramatically on the low side of expectations, uh I think what's instructive is to watch what has happened to the ETFs, the the the Bitcoin and the ETFs, you know, how strong have those holders been.
Uh and they've been pretty strong throughout this down cycle. Now, if you're an institution and you learn about this new asset class and you hear about this four-year cycle, you you'll you'll start you'll dip your toe in and you know, start learning more, especially about this four-year cycle. And you see a a 50% drop in Bitcoin.
And as a traditional asset manager, you know, that is a severe bear market, right? So, that looks like an opportunity. So, we do believe we've seen some averaging down here. Sure you've had weak holders who have exited but you've had them back filled by institutions who are really beginning to understand what this new asset class is.
I don't know if the final washout was 28 trillion or 30 trillion. I mean billion. Sorry about that. 28 or 30 billion but we think that has washed through and so that washing through institutional support maybe four-year cycle. I don't know. Maybe we're ameliorating the four-year cycle now that institutions are learning more but the bottom line is we're in the bottoming process and I do think liquidity is going to give us the next big burst.
Increased liquidity will give us the next big burst in and and I'll tell you one other thing. This is a little esoteric but if you're um your listeners are into economics uh what you see from our money growth rate going up it's at 4.9% right now. Now nominal GDP is around 5% so it's basically accommodating nominal GDP.
Um what the war has done maybe is caused velocity to slow down a bit. The velocity of money is the rate at which it turns over. Uh so if it's increasing then it's turbocharging that 4.9%. Uh in in terms of its impact on economic activity. If it's decreasing then it's a drag. Uh so you know that may have caused some turbulence as well.
Uh some some changes in velocity so we have to watch that as well during the next few months. Yeah. Um yeah that Cathie Wood remains firm in her Bitcoin price prediction, continuing to stand by her long-term outlook despite growing concerns from others. While many investors believe Bitcoin could still crash toward the $50,000 level, she strongly leans in the opposite direction, arguing that the market is more likely to move higher from here with increasing momentum.
In her view, there is no real turning back at this stage, and the current price range around $75,000 should be seen as a valuable opportunity to accumulate. She emphasizes that taking action now could be crucial, as waiting too long may result in significantly higher entry prices later. Looking ahead, she maintains that Bitcoin has the potential to surpass $1 million within the next several years, urging investors to stay prepared and think long-term.
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