Key Points
- Sygnum bank predicts a $20 billion increase in Bitcoin’s market cap for every $1 billion investment.
- The prediction is based on Bitcoin’s scarcity and increasing demand.
Sygnum bank has provided an optimistic outlook for the price and market capitalization of Bitcoin.
Katalin Tischhauser, the bank’s Head of Investment Research, suggests that a $1 billion investment in Bitcoin could lead to a 20-fold increase in its market cap.
Bitcoin’s Scarcity Could Lead to Massive Market Cap Growth
Tischhauser’s prediction is based on Bitcoin’s limited supply. She believes that a sudden increase in demand coupled with a limited supply could cause a significant surge in Bitcoin’s price.
Bitcoin’s maximum supply is capped at 21 million coins, with only a fraction actively available for trading.
Tischhauser argues that this scarcity makes Bitcoin highly sensitive to large investments, leading to a demand shock. This happens when more money enters the market while Bitcoin’s availability continues to decrease.
She stated that the price is shocked to the upside when the amount of money entering the market exceeds the supply available for sale.
She also cautioned that the 20x price surge might not happen instantly. The first billion dollars of inflows may result in minor price increases, but subsequent billions are expected to escalate the price surge.
Who Could Trigger This Demand?
Tischhauser’s research primarily points to governments as potential sources of Bitcoin demand. However, she believes that everyone, including state and local governments, large institutional investors, and corporate treasuries, can contribute to driving up Bitcoin’s price.
Tischhauser’s confidence in this multiplier forecast is also fueled by the growth of stablecoins. Historically, when stablecoin market caps increase, it usually indicates more funds entering the crypto market. This could suggest significant inflows for Bitcoin in the near future.
Inflows from last year also demonstrated a strong multiplier effect. Tischhauser suggested that this could be even better this year, especially if central banks get involved.
