New evidence suggests that if institutional players and mega investors all put at least one percent of their earnings into the world’s leading digital currency by market cap, the asset would reach the $50,000 mark within a relatively short period.
Institutional Players Can Push BTC to the Stars
One of the big things that many analysts say is lacking in the crypto space is the presence of institutional players. While their strength in the space is growing every day, their activity and behavior clearly holds major sway over how and where the bitcoin price will move. In the past, many of these investors have shown reluctance to get involved in the world of crypto trading given that these assets are very vulnerable to price swings and volatility.
However, as time has gone by, this fear appears to be subsiding, with companies like Grayscale offering both bitcoin and Ethereum trusts to its customers and purchasing up a large majority of the new bitcoin units that are being mined. This wouldn’t be happening if bitcoin didn’t qualify as a popular asset among the company’s largely institutional base.
In addition, cryptocurrency exchanges such as Coinbase claim to have at least $1 billion or more flowing through their professional trading platforms (i.e. Coinbase Pro).
Clearly, institutional traders are making a big difference in the expanding legitimacy of bitcoin. However, if they really wanted to pump up the price and make the asset as mainstream as gold, they could do so by allocated approximately one percent of everything they owned into the world’s leading cryptocurrency. If every institutional trader got together and performed this action, there’s little doubt that bitcoin could potentially hit the $50K mark in no time at all.
The research stems from the May 7 action from legendary investor Paul Tudor Jones, who on that date, announced he was going to put as much as one or two percent of all his holdings into bitcoin. He said that he had lost faith in the Fed’s ability to control monetary flow. He was concerned about the excessive printing and the stimulus checks being sent out by U.S. financial authorities, and if he had to bet big, it would be on bitcoin running the show in the coming future.
He stated:
Bitcoin reminds me of gold when I first got into business in 1976. The best profit-maximizing strategy is to own the fastest horse.
A $1 Trillion Market Cap?
This one percent theory was recently tested by Ryan Watkins, an analyst working with Messari. His research shows that if every institutional player followed Jones’ patterns, bitcoin would ultimately hit a market cap of roughly $1 trillion, bringing each unit up to the $50K mark.
Sadly, bitcoin isn’t likely to get this kind of attention and boost until institutional investors feel comfortable enough with BTC, and the only way that will happen is if proper regulation is introduced according to Gemini executives Cameron and Tyler Winklevoss.