Excerpt from ARK Investment Annual Report: The Next Decade of Bitcoin, Ethereum, and Web3

链捕手

特邀专栏作者

2022-01-26 20:00 (UTC+8)

This article is about 4278 words, reading the full article takes about 7 minutes

The investment agency predicts that the price of Bitcoin may exceed $1 million in 2030.

AI Summary

Expand

The investment agency predicts that the price of Bitcoin may exceed $1 million in 2030.

Original author:ARK Investment

Compilation of the original text: Haillsman, chain catcher

Compilation of the original text: Haillsman, chain catcher

ARK Investment led by Cathie Wood released "ARK's Big Ideas 2022" today, which talked about the development status of Bitcoin, DeFi, Web3 and the development trend of the next ten years. Chain Catcher translated and organized these three parts.

first level title

By Yassine Elmandjra, Analyst, ARK

secondary title

1. The total market value of Bitcoin will reach 1 trillion US dollars in 2021

2. Bitcoin market players are maturing and focusing on the long-term

While the level of prosperity has increased as Bitcoin’s price has risen to record highs, on-chain data suggests that Bitcoin holders are focused on long-term growth potential.

3. Bitcoin is gaining market share as a global settlement network

The cumulative transfer volume of Bitcoin in 2021 has increased by 463%. Bitcoin's annual settlement volume has surpassed Visa's payment volume.

4. Bitcoin may continue to scale in response to technological breakthroughs

Last year, Bitcoin made conservative strategic enhancements at the base layer while encouraging “off-chain” experimentation

5. Bitcoin is attracting institutional holders

Bitcoin’s institutional holder base appears to be expanding following the launch of more regulated products and adoption by businesses and countries.

secondary title
6. El Salvador is the first nation-state to adopt Bitcoin as legal tender
In September, El Salvador became the first country to adopt Bitcoin as legal tender.
About 3.8 million people use El Salvador’s digital wallet Chivo, which shows that BTC reaches 84% of the country’s legal citizens.

Chivo sends $2 million a day, about 12 percent of El Salvador's $6 billion in remittances, and annual remittances exceed 2 percent of its GDP.

secondary title

7. Fears of Bitcoin’s “lack of sustainability” are unfoundedOur research shows that Bitcoin could change monetary history by providing financial freedom and empowerment in a fair, global, and distributed manner.

environment:society:

Governance:Governance:

Bitcoin is open, transparent, auditable and predictable. Bitcoin has no central point of failure, reducing potential human bias and error. Bitcoin contains a unique system of checks and balances designed to encourage protocol innovation and maintenance, ensuring that any changes are in the interest of stakeholders.

secondary title

8. Bitcoin mining has grown into a multi-billion dollar industry

Converting energy into monetary assets can be critical in times of geopolitical uncertainty and financial market volatility.
Digital Currency Energy Network
Bitcoin incentivizes the discovery of cost-effective energy, independent of geography and consumer demand. With China cracking down on mining, the U.S. has emerged as the leader in Bitcoin mining, accounting for more than 35% of the total hash rate in November 2021.

Countries like El Salvador are investing heavily in bitcoin mining infrastructure. In October 2021 of this year, El Salvador announced the use of volcanic energy for bitcoin mining. Previously, El Salvador had announced that the state-owned geothermal power company LaGeo planned to develop bitcoin mining.

secondary title

9. Bitcoin mining may completely change the structure of energy production
According to our research, Bitcoin mining will encourage renewable carbon-free energy generation and generate more electricity.
As buyers of energy, Bitcoin miners can incentivize new, more efficient ways of producing energy.
Energy asset owners could become bitcoin miners.

Adding bitcoin mining to the toolbox of power developers should increase the overall addressable market for renewable and intermittent energy. In the lower left corner of the graph, renewable energy might only be able to meet 40% of the grid’s needs without Bitcoin mining. In the upper right corner of the chart, with the introduction of Bitcoin mining, solar and batteries can meet 99% of grid demand.

10. At present, Bitcoin only accounts for a small part of the value of global assets and has huge potential for appreciation

secondary title

11. By 2030, the price of one bitcoin could exceed $1 million

2. Ethereum and DeFi: Financial Revolution

By ARK Analyst Frank Downing and ARK Research Associate Nishita Jain

1. Smart contracts are marginally occupying traditional financial functions

Smart contract platforms such as Ethereum are open and transparent. They do not rely on traditional financial intermediaries, thus reducing counterparty risk.

2. Ethereum hits new highs with DeFi and NFTs

secondary title

text

Higher fees create the need for L2 scaling solutions to reduce transaction fees on Ethereum while maintaining security.

4. Crypto finance may scale more effectively than traditional finance

Financial transactions based on smart contracts can be settled in near real time almost anywhere in the world. The revenue per employee speaks to the efficiency of DeFi compared to traditional finance (TradFi).

secondary title

5. DAOs enable a new form of coordination and governance

Crucial to the governance of DeFi, DAOs are replacing centralized, hierarchical corporate structures with decentralized communities.
For example Uniswap DAO:
UNI token launched in September 2020
The market value of UNI token is about 7.8 billion US dollars

Approximately 296,000 unique addresses holding UNI tokens

secondary title

Stablecoins are crypto assets pegged to fiat currencies, usually the U.S. dollar, which act as a fixed-value asset for crypto transactions, lending, and payments in both centralized and decentralized markets. They have increased nearly 5 times in 2021.

secondary title

8. Work on Ethereum

9. The market value of ether may exceed $20 trillion in the next 10 years

According to our research, Ethereum can replace many traditional financial services, and its native token, ETH, can also compete as a global currency. As financial services evolve on-chain, decentralized networks are likely to take share from existing financial intermediaries. The beneficiaries of this shift include Ethereum, the base protocol, and DeFi, that is, Dapps built on top of Ethereum. As the collateral of choice for DeFi and the unit of account in the NFT market, Ether (ETH) has the potential to capture some of the $123 trillion in global M2.

first level title

3. Web3: Internet Revolution

As consumers turn to the virtual world to spend more time and resources, the importance of digital assets may increase significantly. A new globalization framework, such as NFT, provides a stable way to take the ownership and control of digital assets away from corporations to benefit individuals.

By 2030, we estimate that Web3 will reduce annual offline consumption by US$7.3 trillion and directly increase online consumption by 28% per year, from US$1.4 trillion today to US$12.5 trillion per year.

secondary title

We believe that the Web3 virtual ecosystem will thrive if the number of online participants can truly own digital assets (not just use, rent).

In the traditional Web2.0 business model, users usually face various restrictions on products or services when they quit. For example, they cannot port in-game assets from one game to another, and in addition, they risk censorship from social media platforms that profit from their content. In contrast, public and decentralized blockchains allow users to store and trade assets in a legal secondary market.

2. An open blockchain facilitates the confirmation of digital assets

secondary title

text

Based on public data, Ethereum is the dominant smart contract platform and the blockchain of choice for NFT issuance, sales, and transactions. However, as Ethereum’s fees continue to rise, competition from other layer-1 blockchains and layer-2 scaling technologies increases, and new technologies continue to emerge.

4. NFT may shift from static collectibles to dynamic digital assets

Collectibles and digital art currently account for more than 75% of Ethereum NFT sales. The transaction value of NFT in virtual worlds such as The Sandbox and games such as Axie Infinity accounts for about 25% of the total sales of Ethereum. Based on the development of the video game market, NFT's demand for blockchain-based games and virtual worlds may exceed digital collectibles and art, especially in the next five to ten years, when collectibles and artworks begin to appear in various More use cases emerge in games.

5. Dynamic NFT creates a new and active way of entertainment

The increasing interoperability of NFTs can enable the integration of collecting, gaming, socializing and investing.

6. We believe that NFT will blur the line between consumption and investment

NFT provides a liquid market where consumers can invest in different digital assets and conduct peer-to-peer transactions. NFT buyers and sellers determine the market clearing price on the block, rather than the data aggregation platform, creating a new form of asset monetization.

secondary title

7. Blockchain-based games can entertain and monetize at the same time

The free-to-play model is replacing the paid-to-play model and unlocking a larger user base. Virtual goods and games-as-a-service are increasing revenue growth for game developers.