Cathie Wood is a top investor to watch, thanks in large part to her focus on owning disruptive and innovative businesses operating within cutting-edge technologies. Ark Invest, the firm she runs, offers numerous exchange-traded funds (ETFs) for investors looking to gain exposure.

Wood is known for making bold predictions that catch a lot of attention. However, these forecasts are backed by thorough analysis that provides insights into Ark Invest's thinking.

Cathie Wood believes the top cryptocurrency can soar 635% (as of the price on the afternoon of Feb. 22) throughout the rest of this decade. Understanding its recent developments, as well as what the future could hold, might give you the confidence to buy it.

Recent catalysts drive momentum

Investors familiar with Wood probably already figured out that the crypto in question is none other than Bitcoin (BTC -2.39%). The digital asset's rise was fueled more recently by some key catalysts in the past year.

The introduction of spot Bitcoin ETFs revealed just how much demand there was to invest in a user-friendly, regulatory-compliant vehicle to gain exposure. Ark Invest's research shows that this was the most successful ETF launch ever, with almost $90 billion in cumulative inflows.

Last April, Bitcoin underwent another halving that cut its inflation rate in half. Bitcoin's inflation rate is now lower than gold's, which has historically been the leading store-of-value asset.

The regulatory environment is shaping up to be more accommodating to Bitcoin and the crypto industry. President Donald Trump seems interested in not constraining innovation here. And he has even proposed building up a national Bitcoin strategic reserve. We've already seen individual states propose creating their own Bitcoin stockpiles.

Last year was monumental for the advancement of Bitcoin, particularly as it relates to boosting investor sentiment toward the crypto. This momentum adds fuel to Wood's 2030 price target, which assumes greater institutional investment, adoption as a digital gold, a safe-haven holding in emerging markets, ownership by governments and corporations, and on-chain financial services activity.

Bitcoin's future

These developments are encouraging for Bitcoin. But at the end of the day, what really matters is how many people (and how much capital) view it as a legitimate store of value. Given it's a nearly $2 trillion asset, it's clearly being seen in a favorable light.

Bitcoin's fixed supply of 21 million coins is its defining characteristic. After seeing how much government debt exists worldwide, a figure that continues climbing at an alarming rate, it makes sense why Bitcoin is becoming more popular. It's completely decentralized, and its supply cannot be changed.

If you think the base case is optimistic, which implies a 39% compound annual rise for Bitcoin's price over the next six years, consider Ark Invest's bull case. It forecasts a Bitcoin price of $1.5 million in 2030, translating to an unbelievable total gain of 1,453%. To reach this lofty target, Wood needs to see more capital flowing to Bitcoin.

These forecasts certainly generate a lot of buzz. However, investors should always take them with a grain of salt. Predicting what happens five or 10 years out is an incredibly difficult task, especially when it comes to an asset like Bitcoin that is still undergoing rapid change. This should at least force you to view any price targets with a bit of skepticism.

Nonetheless, it's hard to argue with Bitcoin's track record. In the past decade, its price has skyrocketed 40,150%. While it's unreasonable to assume that kind of gain can continue in the future, I believe Bitcoin deserves serious consideration for long-term investors.