FX168 Financial News Agency (North America) AI is one of the hottest topics on Wall Street, and NVIDIA has always been one of the hottest stocks. Its stock price has surged by 175% in the past year because the company dominates the AI chip market. But AI is not the only trend that can turn small amounts of money into wealth.

Institutions are also betting on cryptocurrencies. The hedge fund managers listed below sold NVIDIA stocks in the first half of 2024 and began buying into the iShares Bitcoin Trust Fund (Nasdaq stock code: IBIT), which is an ETF that tracks Bitcoin at the exchange.

Steven Cohen from Point72 Asset Management sold 3.4 million shares of NVIDIA stock in the first half of 2024, reducing his stake by 63%. He also purchased 1.6 million shares of the iShares Bitcoin Trust Fund.

Israel Englander from Millennium Management sold 7.8 million shares of NVIDIA stock in the first half of 2024, decreasing his stake by 38%. He also bought 10.8 million shares of the iShares Bitcoin Trust Fund.

Ken Griffin from Citadel Advisors sold 33.9 million shares of NVIDIA stock in the first half of 2024, reducing his stake by 93%. He also acquired 63,186 shares of the iShares Bitcoin Trust Fund.

David Shaw of D.E. Shaw & Co. sold 26.3 million shares of NVIDIA stock in the first half of 2024, cutting his stake by 70%. He also purchased 2.6 million shares of the iShares Bitcoin Trust Fund.

These trades are particularly noteworthy because Point72, Millennium, Citadel, and D.E. Shaw rank among the top 15 hedge funds historically in terms of net returns since inception. However, these four fund managers still have exposure to NVIDIA, so it would be wrong to assume that they have completely lost confidence in this AI chip manufacturer.

On the contrary, the lesson here is that portfolio diversification is crucial, and AI is not the only way to make money in the stock market. In fact, Wall Street experts believe that Bitcoin could soar by as much as 77,675% in the next few decades, which means the returns from the iShares Bitcoin Trust Fund could be the same.

Wall Street experts predict that Bitcoin will rise significantly.

Due to the enthusiasm for spot Bitcoin ETFs and the halving event in April, the price of Bitcoin has surged by 133% over the past year. The current trading price of Bitcoin is $63,000, but the following Wall Street experts expect this number to increase significantly.

Tom Lee of Fundstrat Global Advisors believes that by 2029, Bitcoin could reach $500,000. This forecast implies a 690% increase.

Gautam Chhugani and Mahika Sapra of Bernstein believe that by 2033, the value of Bitcoin could reach $1 million. This forecast implies a 1,485% increase.

Cathie Wood of Ark Invest believes that by 2030, Bitcoin could reach $3.8 million. This forecast implies a 5,930% increase.

Michael Saylor of MicroStrategy believes that by 2045, the price of Bitcoin will range between $3 million and $49 million. This forecast implies an increase of 4,660% to 77,675%.

All four Bitcoin bulls' predictions are based on two factors. First, the recent approval of spot Bitcoin ETFs will increase demand, especially among institutional investors. Second, the cyclical halving events that limit the supply of Bitcoin will gradually ease the selling pressure from miners.

The approval of spot Bitcoin ETFs is driving institutional demand for Bitcoin.

Like any other asset, the price of bitcoin depends on the supply and demand relationship. However, this cryptocurrency is a bit atypical because its supply is limited to 21 million coins, making demand the most important variable. That's why a physical bitcoin etf may have a significant impact. They eliminate traditional sources of friction, such as maintaining separate accounts for stocks and cryptos, and paying high fees for each trade.

In detail, a physical bitcoin etf allows investors to increase exposure to cryptocurrencies in existing brokerage accounts, and many funds have relatively low expense ratios. The iShares Bitcoin Trust charges 0.25% fees annually, which means investors will pay $10,000 for every $25 investment. But Coinbase charges trading fees ranging from 0.6% to 10,000% for orders below $0.4. These fees are not only higher, but investors also endure a double hit: one when they buy and another when they sell.

The U.S. Securities and Exchange Commission (SEC) approved a physical bitcoin etf in January, but they have failed to meet the promised release of demand. According to The Wall Street Journal, the iShares Bitcoin Trust funds reached $10 billion in assets faster than any other etf in history. Additionally, I have mentioned four successful hedge fund managers with iShares Bitcoin Trust stocks, but in the second quarter, 592 institutional investors reported positions, up from 436 in the first quarter.

If this trend continues, bitcoin may have higher value in the future. Cathie Wood mentioned that institutional investors manage $120 trillion in assets, allocating a little over 5% of the total amount to bitcoin (or physical bitcoin etfs) would drive its price up to $3.8 million.

Historical data indicates that bitcoin will hit a new high in 2025.

The supply constraint of bitcoin is enforced through regular halving events. Miners receive block rewards (newly minted bitcoins) as incentives after successfully verifying transaction blocks, but every 210,000 blocks added to the blockchain, the reward halves. This occurs approximately every four years.

Importantly, halving events alleviate selling pressure within the mining community simply because the number of bitcoins mined decreases. For example, Michael Saylor estimates that the halving event in April 2024 will reduce selling pressure from $12 billion annually to $6 billion annually. Therefore, bitcoin has reached its peak 12 to 18 months after each halving event in the past.

Bitcoin reached a historical high of $73,000 earlier this year before the halving event in April. Therefore, historical data indicates that its price will surpass that level at some point between April 2025 and October 2025.

Investors should consider the downside risks before buying bitcoin.

Before investing in bitcoin, investors should consider two things. First, even the smartest Wall Street analysts do not know the future, so predictions are just educated guesses. There is no guarantee that bitcoin will reach the price targets I have discussed. Second, bitcoin has experienced multiple drops of over 50% in its relatively short history, and similar pullbacks could occur in the future.