ARK Invest's 2026 Outlook on Bitcoin
ARK Invest CEO Cathie Wood has highlighted Bitcoin's potential as an effective diversification tool for investment portfolios in the coming years, as detailed in the firm's 2026 outlook report.
Wood emphasized that Bitcoin's low correlation with traditional asset classes, including gold, stocks, and bonds, offers investors the possibility of achieving higher returns relative to the risk undertaken. This characteristic is a key factor in its appeal as a diversification asset.
Analysis of Bitcoin's Diversification Characteristics
An analysis conducted by ARK Invest, examining weekly returns from January 2020 to early January 2026, demonstrated Bitcoin's significant diversification qualities. According to the firm's data, the correlation coefficient between Bitcoin and gold measured at 0.14. This contrasts with the correlation of 0.27 observed between the S&P 500 index and bonds.
Further data from the analysis revealed that Bitcoin's correlation with bonds was as low as 0.06. Its correlation with the S&P 500 reached 0.28. Both of these figures are considered limited when compared to the correlations found among traditional asset classes, as indicated in the report.
Bitcoin's Supply Structure and Scarcity
Wood attributed Bitcoin's long-term value proposition significantly to its supply structure. She pointed out that the Bitcoin protocol imposes strict limitations on supply growth. The annual rate of increase in new Bitcoin supply is projected to be approximately 0.8% over the next two years, with a subsequent decline to around 0.4% thereafter. This mathematically determined and predictable supply structure is seen as a creator of natural scarcity, according to Wood's statements in the report.
Impact of Supply Dynamics on Price
The combination of a limited and predictable supply, coupled with increasing global demand, has been a driving force behind Bitcoin's substantial price increase of approximately 360% since the end of 2022, according to Wood. The ARK Invest CEO suggests that the continuation of these dynamics could lead to Bitcoin assuming a more central role within both institutional and individual investor portfolios.
About ARK Invest
ARK Invest is an investment management firm based in New York, specializing in thematic and disruptive innovation strategies.