Cathie Wood says bitcoin could go as high as $3.8 million

• Cathie Wood said Friday that bitcoin could see another $2.3 million added to her existing target of $1.5 million. 
• Her firm gave a target of $1.5 million in January. Bitcoin on Friday was trading around $63,768. 
• The flood of institutional demand and higher portfolio allocations can push the price higher, she said.

Cathie Wood says the price of bitcoin could head to $3.8 million given the latest developments for the world's largest cryptocurrency. 

Speaking at the Bitcoin Investor Day conference on Friday in New York, she told moderator Anthony Pompliano that a flood of institutional adoption and new ETF products means that her bull case could see the token climb by more than $2 million above her existing target. 

Wood's Ark Invest shared a bitcoin outlook in January that estimated the token could hit $1.5 million by 2030. Bitcoin has climbed 44% year-to-date. On Friday, it hovered at around $63,768.

"Last year we put out our bull case for bitcoin. It was $1.5 million. With this institutional green light that the SEC has provided, kicking and screaming though it did, the analysis we've done is that if institutional investors were to allocate a little more than 5% of their portfolios to bitcoin, as we think they will over time, that alone would add $2.3 million to the projection I just gave you."

Ark was one of 11 firms, including BlackRock and Fidelity, that got approval from the SEC for spot bitcoin ETFs earlier this year. Since those products hit the market, demand has boomed, notching all-time records for inflows into US ETFs while also stimulating demand for the crypto itself, which the funds invest in directly and hold. 

Industry veterans also forecast that the bitcoin halving event, which is expected to happen in April, could create a supply shock, which would further catalyze the current demand-fueled rally.

Wood said at the conference, hosted by Reflexivity Research, that she expects the upcoming halving to have a similar effect as the prior events. In the 12 months following the three halvings in 2012, 2016, and 2020, the price of bitcoin climbed 8,069%, 284%, and 559%, respectively.

"We think [bitcoin] has miles to go," Wood maintained. "We're at the very beginning of really putting in place the financial ecosystem native to the internet and disintermediating all of the toll-takers."