Ark's Cathie Wood explains how bitcoin could increase by $400,000

Even before Tesla (TSLA) surprised the crypto markets on Monday with news of its $1.5 billion bitcoin (BTC-USD) buy in January, disruption investor Cathie Wood and her team at Ark Invest had been modeling for more companies to use bitcoin as an alternative to cash on the balance sheet.

“We have been expecting institutions to start moving into Bitcoin and other crypto assets, but primarily bitcoin,” Wood told Yahoo Finance Presents last week.

According to Ark’s Big Ideas for 2021, if all S&P 500 companies were to allocate 1% of their cash to bitcoin, its price could increase by approximately $40,000. If those companies moved 10% of their cash to bitcoin, Ark sees the cryptocurrency climbing by $400,000.