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Bitcoin, ethereum and other major cryptocurrencies have swung wildly this weekbouncing around after a closely-watched bitcoin upgrade.

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The bitcoin price has rallied back toward $60,000 per bitcoin after crashing towards $55,000 earlier this week. Ethereum, the second-largest cryptocurrency by value, has meanwhile soared back toward its all-time highs.

Now, as traders and investors watch for news of who will be the next chair of the U.S. Federal Reserve, Ark Investment Management chief executive Cathie Wood has renewed her huge bitcoin price predictionbut warned over the increasing likelihood of the Fed raising interest rates.

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Cathie Wood, the chief executive of Ark Invest, is a long-time supporter of Tesla CEO Elon Musk as ... [+] has made a name for herself as a bitcoin, ethereum and crypto bullwith her bold bitcoin and etheruem price predictions making headlines.

"There has been a lot of fear," Wood said this week, speaking on a call with finance magazine Barron's. "It was partly behind the correction in May. There was a shiver associated with the end of quantitative easing and then ultimately raising."

The bitcoin price crashed in May this year following a huge rally, with the crash largely put down to China's latest bitcoin and crypto crackdown. The bitcoin price lost around 50% of its value in a matter of weeks in May but has since climbed back to a fresh all-time high of almost $70,000.

This week, analysts at JPMorgan reeled in their prediction of when the Fed will act to curtail inflation, now putting their rate hike prediction at September next year, bringing it forward from 2023. JPMorgan now expects the Fed to raise rates by 0.25% from the third quarter of next year and keep raising them by 25 basis points every quarter "at least until real rates are at zero," it was reported by Reuters.

"I don't think the Fed is going to do anything very quickly and this has been part of the wall of worry in the stock market as well and yet the stock market has continued to go up," said Wood, who's made a name for herself with big bets on bitcoin and Elon Musk's electric car company Tesla.

"You will have corrections for sure if the crypto market continues to scale as dramatically as it has recently, you'll have those fears grip the market from time to time as people simply take profits because the profits have been enormous in the past year."

However, despite raising concerns over short-term price volatility, Wood remains bullish on both bitcoin and ethereum.

"The reason we've used the $500,000 mark for a bitcoin price target is that if institutional investors move into bitcoin and allocate 5% of their portfolios to it, by our estimates bitcoin will go up by $500,000," said Wood. "We can tell this is happening by looking at on-chain analytics," referring to bitcoin's transactions being visible to anyone via its public blockchain.

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Bitcoin's huge price rally this year could mean investors look to take profits if they predict the ... [+] bitcoin price bull run could be coming to an end.

"We can see who's moving in and it looks like strong, institutional holders are moving in [to bitcoin]," she said, asking: "Why are they moving in? Because the correlation of returns among crypto, especially bitcoin, and other assetsstocks, bonds, currencies, commoditiesare very low. Studies tell us that if there's a low correlation of returns among assets, [buying] that asset with the low correlation, you will be raising returns and lowering risk over time."

Wood named a report by Cambridge Associates from 2019 that advised institutional investors to look into bitcoin and crypto.

"What we didn't expect when we did our own study on bitcoin, we didn't expect institutions, mainly corporations, to begin diversifying their cash on the balance sheet into bitcoin," said Wood. Tesla, run by bitcoin and crypto fan Elon Musk, has popularized the idea companies could add bitcoin to their balance sheet, following in the footsteps of business sofware company Microstrategy.

"[Company, corporate and institution interest] will be another source of demand going forward, especially if the Financial Accounting Standards Board changes the accounting rules and shifts away from treating bitcoin as an intangible asset," said Wood.

Wood said she's also still upbeat about etherum's prospects, after the ethereum price has leaped over the last year amid a surge of interest in blockchain-based decentralized finance (DeFi) and non-fungible tokens (NFTs)both largely built on top of ethereum's network.

"We've become just as bullish on [ethereum]," Wood said. "We see DeFi and NFTs taking off on the ethereum network."

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Tesla And Elon Musk Devotee Cathie Wood Issued A Serious Bitcoin And Ethereum Fed WarningBut Held Her Huge $500,000 Price Prediction - Forbes