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Crypto research firm Messari has estimated that Bitcoin could trade for $50,000 each if institutions allocate a low-single-digit portfolio percentage to BTC.
Messariâs Ryan Watkins has crunched the numbers and predicts that if institutions allocate just 1% of their portfolios to Bitcoin, then BTCâs market cap could rise to above $1 trillion,
Watkinsâ research sought to calculate the impact on the BTC price of institutions following the famed hedge fund manager Paul Tudor Jonesâ example of investing a âlow single-digit percentageâ into Bitcoin. Â
$1 trillion BTC market cap
The researcher predicts that a tiny percentage allocation from endowments and foundations, family offices, sovereign wealth funds, pension funds and mutual funds to BTC would result in around $480 billion of new money entering the Bitcoin market.
Citing research by crypto researcher Chris Burniske that found fiat flows into crypto to typically drive price gains of between two times and 25 times during the 2017 bull trend, Watkins estimates that âan aggregate 1% institutional allocation to Bitcoin can easily bring Bitcoinâs market cap above $1 trillion, or over $50,000 per BTC.â
Estimated impact of 1% institutional allocation to BTC on Bitcoinâs market cap: MessariÂ
Which institutions will lead the crypto charge?
While Watkins believes that âBitcoin may not need institutions to succeedâ he says that âif Bitcoin is to become a globally adopted non-sovereign store of value, it will need to convince institutional investors to transfer wealth into the asset.â
Watkins predicted that hedge funds will lead the institutional charge into crypto, however Ryan Radloff, the CEO of multi-billion custodian Kingdom Trust, predicted that the United Statesâ $28 trillion retirement sector will be the first-mover as consumers demand the ability to allocate digital assets toward their retirement portfolios.
Other analysts believe that institutions will be brought into the fold by increasingly sophisticated and regulator-friendly innovations within the crypto asset industries, with BOX Digital Marketsâ Jay Fraser predicting significant institutional engagement with the emerging security token sector.
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