Cathie Wood is known for her exciting and optimistic long-term growth projections. Her investment fund has jumped into some of the trendiest companies and securities of the last decade.

Not all her investments have turned out profitable, but there's no doubt that she understands the world differently than most investors. And this unique mindset has allowed her to pinpoint some major growth investments before the general market gets turned on. Right now, she's a huge fan of an iconic cryptocurrency that she believes could soar in value in the years and decades to come, generating massive wealth for patient investors.

Cathie Wood loves this cryptocurrency

When it comes to cryptocurrencies, Cathie Wood loves Bitcoin (BTC -0.64%). She's been talking about Bitcoin for years, and her long-term projections are truly mouthwatering.

Wood uses the year 2030 for her price predictions, and she has four scenarios that she believes could play out in the five or so years ahead:

• Bear case: $258,500

• Base case: $682,000

• Bull case: $1,480,000

• Bullish case: $3,800,000

So even in her bear case, Wood believes Bitcoin's price will more than double by 2030. That's a solid return over a five-year period. In her base case, however, Bitcoin's price will rise by more than 500%. And in her most bullish scenario, a $100 investment in Bitcoin today would be worth nearly $4,000 by 2030.

To be clear, Wood has put her money and her clients' money where her mouth is. "We were the first public asset manager to gain exposure to Bitcoin in 2015 at $250," she revealed in an interview last year. And she believes that her bullish scenarios have actually gotten more likely with a more friendly regulatory climate, plus gradually more willingness for institutional investors to allocate capital to the largest cryptocurrency in the world.

"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," Wood concludes.

One reason to add Bitcoin to your portfolio

Many investors have already added Bitcoin to their investment portfolios, either through direct purchases or by buying a Bitcoin ETF. If you haven't done so, now is the time.

It's very rare for new asset classes to be created, but Bitcoin is the exception. It has the longest running track record of any cryptocurrency, which gives it a name recognition and reputation edge that only grows over time. And while its price has been very volatile, it's clear that awareness and adoption continues to gradually grow. Because Bitcoin's supply is finite over the long term, this has caused its price to soar over the long term.

Zooming out, Bitcoin is likely just getting started. Gold, another store of value asset, currently has a market cap of around $20 trillion. Bitcoin, meanwhile, still has a market cap of around $2 trillion. Long term, I expect these values to converge completely, adding credence to Wood's lofty price targets.

If you're new to Bitcoin, don't go in head over heels immediately. Try allocating just 1% of your assets to the cryptocurrency. Once a position is initiated, it will be much easier to add more over time if you choose to. But with institutional buy-in gradually increasing, retail investors have an opportunity to have a first-mover advantage in this emerging asset class.