Large investments have been tipped to trigger a 20x multiplier effect on the Bitcois market cap.
Governments, institutions, and stablecoin growth could drive Bitcoin’s next major price surge.
Sygnum has shared a rather optimistic forecast for Bitcoin’s price and its market capitalization at large. The Head of Investment Research at the bank Katalin Tischhauser recently noted that every $1 billion invested in Bitcoin could trigger a 20x multiplier effect. This means that, for every additional billion dollars that the US injects into its strategic Bitcoin reserve, as much as $20 billion could also be added to Bitcoin’s market cap.
Limited Bitcoin Supply to Trigger Massive Market Cap Growth
Tischhauser explains this prediction as being based on the scarcity of Bitcoin. In an interview with , she noted that a sudden surge in demand and squeeze on an already limited liquid supply of Bitcoin would cause its prices to explode.
Moreover, Bitcoin has a fixed maximum supply of 21 million coins and only ever has a fraction of that actively available for trading.
According to Tischhauser, this scarcity makes the cryptocurrency highly sensitive to large investments. She explains this scenario as a demand shock, where more money is entering the market, and Bitcoin’s availability continues to shrink even as its supply gets limited. Tischhauser was quoted in part as saying:
“When the amount of money coming into the market exceeds the supply available for sale, the price is shocked to the upside.”
“When the amount of money coming into the market exceeds the supply available for sale, the price is shocked to the upside.”
She went further by noting that the 20x price surge may not happen immediately. While the first billion dollars of inflows may be absorbed over minor price increases, subsequent billions are expected to escalate the price surge.
Who Could Drive This Demand?
Truly, the research primarily focused on governments as the potential source of Bitcoin demand. However, Tischhauser believes that everyone has a part to play in this. The research head claims that state and local governments, large institutional investors, and corporate treasuries can all help drive up Bitcoin price.
Interestingly, Tischhauser has another reason to be quite confident about this multiplier forecast. First, she cited the growth of stablecoins as a major indicator that good times are coming for Bitcoin.
Historically, when stablecoin market caps increase, it usually shows that more funds are entering the crypto market. So, if that is anything to go by, then Bitcoin may prepare for major inflows in the near future.
Besides, inflows from last year also showed a strong multiplier effect. At the same time, Tischhauser explained that even that could be better this year, particularly if central banks were to get involved.