Billionaires sell Nvidia and buy Bitcoin ETF that Cathie Wood thinks could rise up to 3,700%

Many billionaire investors were charged Nvidia‘s (NVDA 3.10%) Stocks have also risen over the past few years. That’s not surprising, given that its soaring sales of artificial intelligence (AI)-oriented data center GPUs have turned it into one of the hottest growth stocks on the market.

However, it was also not surprising to see some of these large investors reduce their exposure to the chipmaker after its earnings reached 2,100% over the past five years. Nvidia is still growing Like weedBut it still faces long-term challenges such as export restrictions on China, potential antitrust investigations, and competition from other AI chip makers. Macro headwinds could also eventually prompt more companies to curb their spending on new AI software and hardware.

According to the latest 13F filings, some billionaires have sold their shares in Nvidia. Israel Englander of Millennium Management reduced his position in Nvidia by 12.5% ​​in the third quarter of 2024. Yan Huo of Capula Management reduced his stake in Nvidia by 27.7% in the third quarter.

But at the same time, these two closely watched billionaire investors have increased their exposure to… Bitcoin (Bitcoin -3.40%) Through popularity iShares Bitcoin Trust ETF (Ebit 4.43%). During the third quarter, Englander increased his position in the ETF by 12.6 million shares as Huo acquired another 1.1 million shares.

This shift from Nvidia towards Bitcoin indicates The highest cryptocurrency in the world There may still be room for upside after rising more than 1,000% over the past five years. Cathie Wood, who owns Bitcoin through Ark Invest’s 21Shares Bitcoin ETF (ARKB 4.36%)sees its price rising from about $100,000 to $3.8 million by 2030. If that happens, this Spot ETFs It could rise by a whopping 3,700% over the next five years. This upside would turn a modest $10,000 investment into $380,000.

Investors should take these bullish estimates with a grain of salt, as it is still difficult to properly value Bitcoin. But let’s take a look at the potential catalysts for Bitcoin and why it might outperform Nvidia and other growth stocks in the long term.

Bull case for Bitcoin

Bitcoin mining is done using proof of work which consumes a lot of energy (Proof of work) method currently requires powerful application-specific integrated circuit (ASIC) miners. There is a limited supply of 21 million Bitcoins, and 19.9 million of these have already been mined. Every four years, scheduledHalf“Cuts Bitcoin mining rewards in half. The last halving occurred in April 2024, and the next halving is scheduled to take place in 2028.

This rising difficulty will stifle the mining rate of new Bitcoins, and the final Bitcoin is expected to be mined by 2140. All of these qualities make Bitcoin more similar to precious metals like gold or silver than other cryptocurrencies that are “minted” (by create new blocks on the blockchain) or pay them out as rewards through less energy-intensive proof of stake (Points of sale) mechanism. That’s why the Securities and Exchange Commission (SEC) approved the first bitcoin spot ETFs last January. The SEC also states that Bitcoin is the only cryptocurrency that can be classified as a commodity.

Many Bitcoin bulls believe these strengths make it a viable alternative to gold and other commodities as a hedge against inflation. El Salvador and the Central African Republic have already tried to adopt Bitcoin as a national currency, and other countries with inflation and currency devaluation issues may follow suit. When that happens, more institutional investors will likely boost their exposure to Bitcoin — especially through easily traded spot-priced ETFs — and push its price higher.

But can Bitcoin really outperform Nvidia in the long term?

Bitcoin has more obvious strengths than many other cryptocurrencies, but its true value is almost impossible to determine. If it actually rises 3,700% over the next five years, it would likely beat Nvidia by a mile — because that kind of rise would push the chipmaker’s $3.3 trillion market cap to roughly $126 trillion.

Even the most optimistic investors in Nvidia probably don’t expect it to approach that valuation by 2030. But with Bitcoin, that’s hard to know. Bitcoin’s market value will rise from $2 trillion to about $76 trillion if its price reaches $3.8 million, however this valuation may be justified if it replaces gold – which has a market capitalization of $18.5 trillion – as the world’s most valuable asset. So, if you think Bitcoin still has a bright future, it might be smart to follow these billionaires and bite into spot-priced ETFs.