Bitcoin investors will no doubt be feeling a little vindicated right now, with the cryptocurrency expected to soon pass over the $1 trillion mark in terms of market value.
There’s early signs that Wall Street is now finally beginning to take bitcoin seriously, with well-respected hedge fund manager Paul Tudor Jones revealing last month he had invested ‘just over 1%’ of his assets in the relatively new currency.
Experts in the field have now discovered that an aggregate 1% institutional allocation to bitcoin may ‘easily’ bring the total currency value above $1 trillion, bringing the worth of each bitcoin token up to over $50,000. At the moment, the tokens are worth $10,000.
In an article published on the Messari website, researcher and previous investment banking professional Ryan Watkins wrote:
Institutional investors are the white whales of cryptocurrency. Ever so elusive, institutional investment in cryptocurrency has long been considered the most significant barrier between Bitcoin and a multi-trillion dollar market capitalization.
In anticipation of their hopeful arrival, firms have raised more than a billion dollars in order to build infrastructure to serve them. And deal activity is picking up as the perfect storm appears to be brewing for investment in Bitcoin.
Conducting research into what would happen should institutional investors begin following Tudor Jones’ example, Watkins found there would be ‘hundreds of billions if not trillions $ in inflows’.
The would have a substantial impact on the value of bitcoin, with Watkins suggesting that ‘an aggregate 1% institutional allocation to Bitcoin can easily bring Bitcoin’s marketcap above $1 trillion, or over $50,000 per BTC’.
UNILAD spoke with Billy Bambrough, a journalist who specialises in writing about cryptocurrency and blockchain, about this research, and what it means for bitcoin going forward.
According to Bambrough, the bitcoin market as it currently stands is worth an approximate $180 billion and ‘there’s a long way to go before it reaches $1 trillion’:
The research carried out by Messari indicates bitcoin’s market value could increase dramatically if institutional investors, that is to say big banks, get involved in bitcoin buying and trading.
However, Bambrough noted that the price of bitcoin is still only around half of what it was back in the ‘heady days of late 2017’, meaning many of those who hopped aboard the cryptocurrency craze at that time may have been left short.
If the bitcoin price does soar to the kind of levels some bullish analysts have predicted then those who have already invested might see good returns on investments they’ve perhaps written off.
Bambrough suggested others are likely to ‘rush into the market’ if the bitcoin price returns to its all time highs, ‘due to a fear of missing out’.
A return to bitcoin’s all-time highs and beyond would vindicate those who bet on bitcoin during 2017, provided they are still able to access their bitcoin wallets, however. Bitcoin is like cash: if you lose your wallet, there’s little chance of you getting it back.
As reported by AMB Crypto, bitcoin has had difficulties attaining new heights after the last bull run of December 17, 2017.
However, it would appear we’re now looking at a very interesting time ahead for investors, who are once again feeling enthusiasm for this alternative currency.