ARK Invest: Optimal 2023 Portfolio Bitcoin Allocation at 19.4% for Maximum Risk-Adjusted Returns

According to the “Big Ideas 2024” report released by ARK Invest, research indicates that, to maximize risk-adjusted returns, the optimal allocation of Bitcoin in a portfolio for the year 2023 is 19.4%, significantly higher than the 6.2% in 2022.

If 2.5 quadrillion dollars of global investable assets were allocated to Bitcoin, it would have a significant impact on its price. Allocating 1% of this total would potentially drive the Bitcoin price to $120,000. Allocating 4.8% could push it to $550,000, and allocating 19.4% might result in a Bitcoin price reaching $2.3 million.

Furthermore, the report highlights that smart contracts can facilitate the origin, ownership, and management of on-chain assets with only a small fraction of the financial costs associated with traditional assets. If financial assets move to blockchain infrastructure at a speed similar to the adoption of the internet and fees related to decentralized financial services are one-third of traditional financial services, smart contracts could generate over $450 billion in fees annually, creating a market value exceeding $50 trillion, with compound annual growth rates of 78% and 32% by 2030.