Bitcoin could play an increasingly important role in institutional portfolios, according to Ark Invest CEO Cathie Wood, who described the asset as an effective diversification tool in her 2026 market outlook.

In a comprehensive analysis, Wood highlighted Bitcoin’s low correlation with major asset classes such as gold, equities, and bonds, arguing that this characteristic makes it worthy of serious consideration by asset allocators.

“Bitcoin should serve as a strong source of diversification for asset allocators seeking higher returns per unit of risk,” she wrote.

Data from Ark Invest shows that since 2020, Bitcoin has exhibited weaker price correlations with stocks, bonds, and even gold than those assets have with one another. For instance, Bitcoin’s correlation with the S&P 500 stands at just 0.28, compared with a correlation of 0.79 between the S&P 500 and real estate investment trusts (REITs). This suggests that Bitcoin’s low correlation enhances its appeal as a diversification asset.

For large institutional investors focused on risk-adjusted portfolio construction, Wood believes Bitcoin has the potential to move beyond its reputation as a purely speculative asset. A long-time Bitcoin bull, she maintains a price target of approximately $1.5 million for Bitcoin by 2030.

However, Wood’s bullish stance comes at a time when some voices on Wall Street are turning more cautious. Jefferies strategist Christopher Wood recently reversed his recommendation to allocate 10% of portfolios to Bitcoin, replacing it with gold instead. He had originally added Bitcoin to his model portfolio in late 2020 and increased the allocation to 10% in 2021. According to Wood, advances in quantum computing could eventually undermine the security of the Bitcoin blockchain, weakening its appeal as a long-term store of value.