The cryptocurrency research firm Messari recently gave an estimate in the Bitcoin news, saying that the BTC price could rally to $50k once 1% of institutions enter the crypto industry.
Messari estimated this price level if the institutions would allocate a low-single-digit portfolio percentage to BTC. One of the most popular analysts working for the firm, Ryan Watkins, has crunched the numbers and predicts that if institutions allocate just 1% of their portfolios to Bitcoin, the BTC market cap could rise to above $1 trillion.
The research carried out by Watkins sought to calculate the impact on the BTC price of institutions following the famed hedge fund manager Paul Tudor Jones’ example of investing a “low single-digit percentage” into Bitcoin.
Depending on your assumptions, an aggregate 1% institutional allocation to Bitcoin can easily bring Bitcoin’s marketcap above $1 trillion, or over $50,000 per BTC pic.twitter.com/8vogmvevWf
— Ryan Watkins (@RyanWatkins_) June 23, 2020
Watkins also says that the BTC price could rally to $50k with only a tiny percentage allocation from endowments and foundations, as well as family offices, sovereign wealth funds, pension funds, and mutual funds to BTC which would result in around $480 billion in new money entering the Bitcoin markets.
He also cited research carried out by Chris Burniske, founding out the fiat flows into crypto to typically drive price gains of between two times and 25 times during the 2017 bull trend. Watkins here estimates that ” “an aggregate 1% institutional allocation would show how the BTC price could rally to over $50,000 per BTC”. In a similar fashion, he said that the Bitcoin market cap could hit $1 trillion in a scenario like this one.
— Chris Burniske (@cburniske) September 20, 2017
The cryptocurrency news also show that while Watkins believes that “Bitcoin may not need institutions to succeed,” he says that “if the coin is to become a globally adopted non-sovereign store of value, it will need to convince institutional investors to transfer wealth into the asset.”
In a similar fashion, Watkins predicts that while BTC price could rally to $50k, hedge funds will take the institutional charge into crypto. Other analysts believe that institutions will be best brought into the fold by increasingly sophisticated and regulator-friendly innovations in the crypto asset industries. The chief at BOX Digital Markets, Jay Fraser, predicted significant institutional engagement with the emerging security token sector.
All in all, institutions are definitely needed to propel the price of BTC upwards and help the crypto ecosystem mature.
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