• ARK CEO thinks Bitcoin could go as high as $500,000
  • Institutional investors are increasingly becoming interested in Bitcoin
  • Bitcoin is seen as a digital version of gold

With Bitcoin nearly touching $19,000 in the last few days, many analysts are of the opinion that the benchmark cryptocurrency still has room to grow to as much as $500,000.

Institutional investors are now ramping up their purchase of Bitcoins. ARK Investment's Catherine Wood suggested that if all institutions would assign even a mid-single-digit allocation to Bitcoin on their portfolio, its value would increase tremendously. "The cryptocurrency could rise to somewhere in the $400,000 to $500,000 range," she told news outlet Barron's during an online event.

Woods said institutions have been increasing their allocation of Bitcoin, and their numbers are increasing significantly. The ARK Investment CEO compared this movement to the early days when institutions first moved to real estate and emerging markets. "They started out with a half a percent allocation, then 1%, then 5%," she said. 

Bitcoin is seen by investors – retail and institutions alike – as a digital version of gold or as a hedge against inflation. The weakening dollar contributed to this "Bitcoin is digital gold" narrative. Quantitative easing or the effort to put more cash into the financial system to jolt the economy with spending has weakened the dollar. This served as a catalyst for even large companies, including publicly-listed MicroStrategy, to turn much of their cash reserves into Bitcoin last August.

Wood has noted that Bitcoin's supply is definite – at 21 million BTC. So far, 18.5 million BTC has already been mined. If institutional investors take a greater interest in Bitcoin, it could send the price even higher, she added.

Bitcoin closed Sunday at $18,437 after reaching as high as $18,900 the previous day, a new 2020 high for the benchmark cryptocurrency. Bitcoin was the best performing major cryptocurrency in the past month, increasing by 36% in the last 30 days. It is also up 158% since the beginning of the year and up 380% since March 2020.