Bitcoin going to $500K?

Flags of Coinbase and NYSE flying in the wind
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Wood is no stranger to making bold predictions, but her price target for Bitcoin may shock even the most bullish crypto enthusiasts.

In September, the super investor told CNBC that the price of bitcoin could soar to over $500,000 in five years.

And she’s doing more than just talking. Her flagship fund — ARK Innovation ETF — owns 3.69 million shares of Coinbase Global, a stake worth over $1.2 billion.

In fact, Coinbase is the third-largest holding of the ARKK ETF right now.

As the largest cryptocurrency exchange in the U.S., Coinbase makes money every time someone buys or sells crypto on its platform.

In Q3, the company had 7.4 million monthly transacting users. It earned $1.24 billion in net revenue and $406 million in net income for the quarter.

To be sure, Coinbase shares trade at over $330 each. But you can get a piece of the company using a stock trading app that allows you to buy fractions of shares with as much money as you are willing to spend.

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Bitcoin to unite the world?

A bitcoin with the Square company logo
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You don’t have to look very far to see where Dorsey stands on the subject of Bitcoin. His Twitter bio says only this: #bitcoin.

In August, Dorsey tweeted that Bitcoin “will unite a deeply divided country” and eventually the world.

Dorsey told investors earlier this year that Bitcoin will be a “big part” of the social media company’s future.

But Dorsey’s most direct involvement in the cryptocurrency is through Square, another tech giant he co-founded.

The company got into crypto quite early: Square’s Cash App allowed users to buy Bitcoin in late 2017. Users can now send and receive Bitcoin in the app without paying any transaction fees.

In Q3, Square’s Bitcoin revenue totaled $1.81 billion. The company is also building a Bitcoin mining system.

A finer (hyper)inflation hedge?

Portrait of positive young girl attentively looking at paintings in art museum
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One of the main reasons Bitcoin can be an inflation hedge is its limited supply. Unlike fiat money — which can be created out of thin air — the number of bitcoins is capped at 21 million by mathematical algorithms.

But Bitcoin is not the only in-demand asset with a limited supply.

If you want to invest in something that’s inflation-proof that has little correlation with stocks and crypto, consider a real, but overlooked asset: fine art.

Contemporary artwork has already outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich, like Dorsey and Wood.

But with a new investing platform, you can invest in iconic artworks too, just like Jeff Bezos and Bill Gates do.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

Investing in art by the likes of Banksy and Andy Warhol used to be an option only for the ultrarich. But with a new investing platform, you can invest in iconic artworks just like Jeff Bezos and Bill Gates do.

About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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