Over 1 Trillion Bitcoin Cap Seems To Be True Now - Market Analysis.

Over 1 Trillion Bitcoin Cap Seems To Be True Now - Market Analysis.

2020-10-27 | Selina Mathew

Over 1 Trillion Bitcoin Cap Seems To Be True Now - Market Analysis.

Bitcoin [BTC] has recently seen ample interest from a variety of mainstream firms and persons, like billionaire hedge funder Paul Tudor Jones. This might be the starting of a new wave of Bitcoin buyers, consistent with Brian Estes, chief investment officer and managing partner at Off The Chain Capital - an investment firm focused on blockchain and digital assets.

"I think eventually all corporate treasuries will have a little number of their reserves in Bitcoin," Estes added within a recent official interview.

A growing number of firms are looking to Bitcoin as a part of their treasury fund equation. Two of the newest entrants to the Bitcoin ecosystem, MicroStrategy and Square, recently bought approximately $425 Mln and $50 Mln worth of BTC respectively. "Those are two of the Fortune 1000 firms and that i think there's 998 left to travel," Estes added.

While operating in partnership with a variety of its partners, Off The Chain crunched a couple of numbers supported hypothetical scenarios, matching each company's presumed investment capability with possible Bitcoin purchases. "There's $4 trillion of treasury reserves at public corporations today," Estes added. "If just 1% of that moves into Bitcoin, that's $40 Bln."

"The multiplier effect for each dollar that goes into Bitcoin, Bitcoin goes up somewhere between $20 and $100 in market capitalization," Estes explained. "If there's $1 Mln in Bitcoin bought, the market cap of Bitcoin goes up between $20 Mln and $100 Mln."

This multiplier effect relates to the supply of funds on order books across crypto exchanges, consistent with Fundstrat senior research analyst and director David Grider. "Reason you get this effect is, as altogether markets, it’s the marginal liquidity at the sides that sets the worth and value for the whole asset base," Grider explained.

On the low end of the spectrum, multiplying the $40 Bln estimate by twenty would boost Bitcoin's market cap by $800 Bln, Estes speculated. this is able to push Bitcoin's market cap past $1 trillion, up from its present $222 Bln evaluation.

"If 1% of treasury reserves from public companies enter Bitcoin, Bitcoin is a trillion-dollar market capitalization, on the conservative side, and it might be a $5 trillion dollar market capitalization if we use the 100 number," Estes explained. "That doesn't count central banks and other institutions which will be coming in afterward."

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