Since crossing the $100,000 mark for the first time in late 2024, Bitcoin has largely traded sideways. That is an "extremely healthy" sign for the world's largest cryptocurrency, according to ARK Investment Management CEO Cathie Wood.

"We would not want the market to continue straight up to the right without looking back. We want a wall of worry," Wood told attendees at the Cboe Global Markets 2025 Bitcoin Outlook webinar on Friday.

The longtime Bitcoin bull has previously predicted that the crypto's price could reach $1.5 million. During the webinar, she called Bitcoin a promising new asset class that money managers have "some fiduciary responsibility" to understand. Institutional adoption of Bitcoin is in its "early stages," she said.

"In terms of the ramp in Bitcoin's price, we're at nearly 20 million out of the 21 million units outstanding and only now are institutions getting involved," Wood said. The numbers refer to the circulating supply of Bitcoin and the amount left to be mined, respectively.

The latest Bitwise and VettaFi survey on financial advisors' attitudes toward crypto assets shows that 22% of respondents started allocating crypto in client accounts in the past year, twice the rate in 2023 and a record high for the poll.

The establishment of a U.S. reserve of Bitcoin could drive further acceptance of the cryptocurrency, Wood said, nodding to President Donald Trump's campaign promise to establish a government stockpile.

On Jan. 23, Trump signed an executive order establishing a "Working Group on Digital Asset Markets," which doesn't mention a strategic reserve. The coalition is tasked with submitting a report that outlines regulatory and legislative proposals for cryptos within 180 days.

The regulatory environment is shifting, too. Wood noted that the Securities and Exchange Commission agreed to drop its case against Coinbase, according to the cryptocurrency exchange on Friday.

"I think the regulatory regime, clarity there, is going to unleash a huge amount of innovation around Bitcoin and other digital assets," Wood said.

There are more ways for investors to gain exposure to crypto, too. Rob Marrocco, Cboe's global head of exchange-traded fund listings, said Bitcoin ETFs filled "pent-up demand" for the digital currency when they were introduced in the U.S. just over a year ago.

Since then, U.S.-listed Bitcoin ETFs have reached assets under management of more than $120 billion, surpassing the amount managed under gold ETFs. A Dec. 17 report from K33 Research pegged that number at around $129.25 billion, outstripping the assets under management of gold ETFs at $128.88 billion.

There are ways to keep the momentum going, Marrocco said. The next step is to "build out the ecosystem surrounding those ETFs," including the launch of Bitcoin ETF index options, which Cboe announced on Feb. 13.

The options "provide benefits for traders who want to gain exposure to spot Bitcoin ETFs without having to hold Bitcoin," Cboe said.

BlackRock, the owner of the iShares Bitcoin Trust ETF -- the largest Bitcoin ETF in the U.S. -- said in a December 2024 report that investors should consider a 1% to 2% Bitcoin allocation to diversify their portfolio without assuming outsize risk.

A 2% allocation would have a similar share of total portfolio risk as holding the Magnificent Seven stocks, BlackRock said. However, investors should "regularly review Bitcoin's changing nature and their allocation, " as the crypto is volatile, the company advised.

So, what's next for Bitcoin? Wood, for one, is eager to see the Trump-era policy changes unfold, possibly ushering in the golden age of cryptocurrency that Americans were promised.

"Once we understand when the tax cuts are, when the regulation cuts are, there will be an unleashing of animal spirits," Wood said.