Bitcoin Could See ‘20x Multiplier’ From Strategic Reserve Inflows: Sygnum Analyst – CryptoMode
Bitcoin, already riding a wave of renewed investor enthusiasm, could experience a dramatic surge in value should a hypothetical U.S. strategic reserve begin accumulating the cryptocurrency.
Katalin Tischhauser, Head of Investment Research at Sygnum, projected that every billion dollars flowing into BTC as part of such a reserve could trigger a multiplier effect, potentially expanding the cryptocurrency’s market capitalization by as much as $20 billion.
Speaking to The Block, Tischhauser explained that this phenomenon would be driven by the direct infusion of capital and a significant upward pressure on prices.
“Each $1 billion of strategic reserve purchases could drive a 20x multiplier effect on bitcoin’s market cap,” Tischhauser stated.
She added that the projected $19 billion increase beyond the initial investment would result from a surge in demand and a tightening grip on Bitcoin’s already limited readily available supply.
It’s worth noting that Bitcoin has stood out in the cryptocurrency market. The cryptocurrency’s dominance has recently risen to a three-year high amid growing trade war fears, indicating a flight for safety among investors.
Limited Bitcoin Supply Amplifies Potential Price Rise
Tischhauser emphasized that the inherent scarcity of easily traded BTC amplifies the potential impact, saying that the “potential demand shock will be so significant because the liquid supply of Bitcoin is really small.”
Tischhauser posited that the initial billion-dollar inflows might largely “burn through” readily available BTC. Subsequent billion-dollar tranches would encounter an increasingly constrained supply environment, leading to a “demand shock.”
The Sygnum research head highlighted that the anticipated surge in demand could originate from diverse sources, including state and local governments seeking reserve assets, allocations from major investors, and corporate treasuries.
Notably, BlackRock has been making it easier for investors to gain access to the flagship cryptocurrency, having recently revealed it’s set to unleash a Bitcoin exchange-traded product in Europe after the success of its fund in the U.S.
