Bitcoin‘s value could reach $91,000 during a bear market and soar to $650,000 in a bull market as a result of the eventual approval and widespread use of Bitcoin exchange-traded funds (ETFs) in the upcoming years.
Based on a post by cryptocurrency expert Willy Woo on Twitter, Bitcoin may reach these price levels if investors follow through with purchasing Bitcoin ETFs as suggested by financial advisors.
Bitcoin’s New Price Targets
The Bitcoin expert supported his statement by performing detailed calculations using suggestions for allocation, inflows from self-custody, and the market value to realized value ratio (MVRV). In simpler terms, he provided evidence for his argument by considering various factors such as suggested investments, funds moving into personal wallets, and the comparison of Bitcoin’s current market price to its past transaction prices.
Woo shared that major asset managers such as Fidelity suggest holding cryptocurrencies like Bitcoin in portfolios at a modest percentage of up to 2%. With approximately $100 trillion under their management, this equates to around $2 trillion available for crypto investments. This amount is expected to grow larger as Bitcoin becomes more widely adopted.
Bitcoin currently has approximately $561 billion worth of investments. By adding the estimated $2 trillion, the total investment would reach an impressive $2.56 trillion, expanding the Bitcoin ecosystem substantially. However, this number could be even greater if we take into account the recent inflows of self-custody investments. According to Woo, these flows are currently larger than estimated, implying that the actual value could exceed $2.56 trillion.
Exceeding Gold’s Market Cap
In simpler terms, the MVRV (Market Value to Realized Value) ratio is used to determine market capitalizations relative to investment. In bull markets, this figure is multiplied by 5, while in bear markets it’s multiplied by 0.7. This results in a crypto market capitalization of approximately $12.8 trillion at market peaks and around $1.8 trillion during market bottoms. Translated to Bitcoin, this equates to roughly $91,000 per BTC at tops and $650,000 per BTC at bottoms.
Woo explained that Bitcoin probably won’t reach the projected prices of $91,000 and $650,000 during this phase because large investments take significant time to materialize. Nevertheless, it’s certain that Bitcoin will surpass gold’s market capitalization once ETFs have fully developed.
“The numbers given are quite cautious. According to the Bitcoin analyst, Bitcoin is expected to surpass gold’s market cap once ETFs have fully played their role. In other words, Bitcoin will definitely outshine gold in terms of market value when institutional investors have fully invested. Gold experienced a bull run for 12 years after its ETF was launched, and now it’s Bitcoin’s turn to do the same.”
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2024-04-15 17:40