Ark Invest report: The optimal allocation ratio of Bitcoin in the 2023 portfolio is 19.4%

ChainCatcher news, Ark Invest stated in the "Big Ideas 2024" report that based on the volatility and returns of traditional asset classes, research indicates that to seek maximum risk-adjusted returns, the optimal allocation of Bitcoin in the 2023 portfolio is 19.4%, compared to just 0.5% in 2015, and an average optimal allocation of 4.8% from 2016 to 2022. Furthermore, the report claims that among the global $250 trillion of investable assets, allocating 1% to Bitcoin could lead to a price potential of $120,000, 4.8% allocation could reach $550,000, and 19.4% allocation could result in a price potential of $2.3 million.

Regarding smart contracts, the report states that smart contracts can facilitate the creation, ownership, and management of on-chain assets at a fraction of the cost of traditional finance. If financial assets migrate to blockchain infrastructure at a pace similar to internet adoption, and the rates associated with decentralized financial services are one-third of traditional financial services, then smart contracts could generate over $450 billion in annual fees, creating over $5 trillion in market value, growing at compound annual growth rates of 78% and 32% by 2030, respectively.