Dilution of Demand Does Not Change Bitcoin's Long-Term Outlook Ark Invest for 2030

Although crypto capital flows are experiencing significant compositional changes, Ark Invest remains confident that bitcoin will reach a price range of $300,000 to $1.5 million by 2030. These changes, analyzed by David Puell from Ark Invest, indicate that the market question is no longer about bitcoin adoption but about the scale of exposure and the investment channels chosen by investors. The current bitcoin price is around $87,410 with a -2.93% fluctuation in the last 24 hours, reflecting ongoing market dynamics.

Dilution of Demand: When Stablecoins Shift Capital Flows

The phenomenon of bitcoin demand dilution occurs when capital flows initially projected into the digital asset shift to alternative instruments like stablecoins. Puell admits that some safe-haven demand from developing country markets, previously expected to flow into bitcoin, has instead shifted to stable cryptocurrencies. However, this dilution does not entirely negate the long-term investment thesis, as stronger interest in bitcoin’s digital gold use case has largely offset this shift.

Ark’s model adjustments show flexibility in understanding how bitcoin demand evolves. “Demand composition has evolved, but the long-term thesis remains intact,” Puell said. This indicates that even with certain dilution in capital flows, the bullish fundamentals for bitcoin remain solid.

Bitcoin ETFs Absorbing Global Supply and Demand Dynamics

Since the launch of spot bitcoin exchange-traded funds (ETFs) in early 2024, the bitcoin investment landscape has undergone a fundamental transformation. US spot bitcoin ETFs have attracted over $50 billion in net inflows in about 18 months, changing how institutional investors access this asset without the need for self-custody.

Products like BlackRock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) have dominated these capital flows. Collectively, ETFs and digital asset structures in treasury have absorbed about 12% of the total bitcoin supply, far exceeding initial expectations. This absorption rate is a key driver of price action through 2025, a trend Puell believes may continue into 2026 and beyond.

The 2026 Battle: Early Adopters Taking Profits vs. Institutional Accumulation

Market dynamics in the coming years will be shaped by the tug-of-war between two opposing forces. On one side, long-term holders who bought bitcoin over a decade ago are increasingly willing to take profits as prices reach new highs. In bullish markets, early adopters tend to take more aggressive profits near the peak.

On the other side, institutions continue building positions through ETFs and digital asset treasury strategies. This fundamental dynamic will dominate 2026: profit-taking by pioneers versus ongoing accumulation by institutional investors. This battle creates targeted yet measured volatility, unlike the more chaotic bull cycles of the past.

Historic Low Volatility: Access for Conservative Investors

One of the most significant structural changes is the increasingly subdued volatility profile of bitcoin. Bitcoin’s volatility has reached historic lows, reinforcing the view that risk-adjusted returns are improving markedly.

In previous market cycles, declines of 30% to 50% during bullish phases were common. Since the lows of 2022, bitcoin has not experienced declines of more than about 36%, a pattern vastly different from its historical volatility. This reduced volatility, along with relatively mild losses, broadens bitcoin’s appeal to more conservative investors previously deterred by its extreme risk profile.

Sophisticated investors are now less likely to invest aggressively in parabolic moves, instead holding cash to deploy during downturns. This strategy smooths volatility and shortens recovery periods from drawdowns.

Ark Valuation Framework: Three Scenarios for Bitcoin 2030

While acknowledging dilution in demand composition, Ark Invest remains confident in its long-term valuation framework. The firm projects three scenarios for bitcoin in 2030:

• Bear Scenario: around $300,000 per bitcoin
• Base Scenario: close to $710,000 per bitcoin
• Bull Scenario: around $1.5 million per bitcoin

In the bear and base scenarios, the digital gold narrative—bitcoin as a store of value—contributes the most to the price estimate. Meanwhile, massive institutional investment forms the largest portion of the upside potential in the bullish scenario. One supporting factor is the increasingly “locked” bitcoin supply, with on-chain data showing approximately 36% of bitcoin supply effectively locked by long-term holders.

Structural Tailwinds: Macro Liquidity and Regulatory Clarity

Macro conditions may become more supportive of bitcoin in the coming years. The end of the US monetary tightening phase could open the door for renewed liquidity, a backdrop historically favorable for risk assets like bitcoin. For bitcoin, US liquidity is more important than global M2, given the country’s dominance as the largest capital base in the world.

Additionally, regulatory clarity under the new administration, the emergence of staking-related ETFs, and rising interest at the state level, such as in Texas, create long-term structural tailwinds. Strategic bitcoin reserves that governments may adopt will not generate direct new demand but will strengthen the base of strong holders unlikely to sell, thus reducing supply in the market.

Beyond Dilution: A New Paradigm of Bitcoin Ownership

The maturing of bitcoin as an asset suitable for institutional adoption may ultimately prove as important as any single price level. The shift from “whether to invest in bitcoin” to “how much bitcoin you want to hold and through what means” marks a fundamental paradigm shift in how the market views this asset.

The demand dilution phenomenon faced at this stage is not a bearish signal but part of bitcoin’s organic evolution toward a more mature and integrated asset within institutional portfolios. Ark Invest maintains its focus on a five-year horizon rather than short-term price predictions, remaining confident that bitcoin’s economic fundamentals for long-term growth remain robust despite the evolving demand landscape.