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An increasing amount of Bitcoin is being accumulated by institutions.
This much was made clear on Tuesday, when Stone Ridge Asset Management revealed to Forbes that it had picked up 10,000 BTC, representing one percent of its assets under management.
Investors think that further institutional adoption of the cryptocurrency could result in the Bitcoin price going parabolic.
Bill Barhydt, CEO of Abra and a former employee of the CIA and Goldman Sachs, recently said that if only 5% of the liquid assets that the top nine firms in the S&P 500 own were to enter Bitcoin, it would surge:
“9 companies alone in the S&P 500 are sitting on close to $600 billion in cash and short term investments. 5% of that moving into Bitcoin (or $30 billion) would likely 5x the price of Bitcoin given the lack of sellers. (3/6).”
While this math may not add up in your mind, take fiat amplifiers into account.
The amplifier is a concept that for every fiat dollar that is invested in Bitcoin or cryptocurrencies in general, the market capitalization of the space will grow than more than $1.
Estimates suggest that the fiat amplifier is anywhere from two to 25 times, depending on what phase of the market cycle cryptocurrencies are in.
In periods where investors are expecting upside, the fiat amplifier grows as investors don’t want to sell their coins too early.
Barhydt’s analysis of the institutional adoption situation comes as he is seeking to increase his personal exposure to Bitcoin.
He said that he is “considering doubling the allocation of Bitcoin in my personal portfolio to 25%.”
Explaining why he thinks this is a good idea, he pointed towards inflationary trends:
“Given the acceleration of currency inflation and the likely price inflation to follow this seems like a better weighting than my current 12%.”
He added that the contacts he has spoken with say that returns in legacy markets such as equities are likely to be “muted in the next five years.”
This trend may have the effect of driving capital into alternative assets that may be able to generate healthy returns such as gold and Bitcoin.
The comments he made are reminiscent of those made by a number of other investors in the space, who have dramatically increased their exposure to Bitcoin amid the ongoing macro backdrop.
Raoul Pal, CEO of Real Vision, for instance, has over 50% of his liquid net worth in Bitcoin.
In other trending Bitcoin News today:
Max Keiser Predicted Hash Wars: A New Front for Countries
The concept of fiat money can be said to be one of the best inventions of mankind.
However, that resulted in a huge wealth gap among the nations and people around the world.
It is no secret that the world’s top 10% richest hold 85% of the total wealth whereas the remaining 90% of people own only 15% of the total wealth.
Then came the year 2009 and we saw a rise of a new concept of money – a cryptocurrency called Bitcoin.
With the invention of cryptocurrency, we’ve stepped in a brand new world.
The first cryptocurrency Bitcoin revolutionized the whole concept of money, the way to transact it without the need of a third-party and a trustless system.
With the unprecedented rise of Bitcoin’s value in the past decade, the countries around the world started noticing the remarkable effect of cryptocurrencies on the global economy.
That opened a new gate – the fight for Bitcoin dominance. Hence the hash wars. To understand what hash rate is, basically it’s a measure of the processing power of the Bitcoin network.
So, whoever has more processing power on the Bitcoin blockchain network has more dominance over Bitcoin and its future.
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DISCLAIMER: This is NOT financial advice. The views and opinions expressed in this video are just opinions, nothing more. Trading is very risky, especially when trading with leverage. Seek financial advice from a professional and trade at your own risk because I am not responsible for any investment decisions that you choose to make.
Show Notes / Resources:
How Bitcoin Could Surge 500% Amid Rising Institutional Adoption
https://cryptotop10.org/top-10/hash-wars-a-new-front-for-countries/
https://decrypt.co/44880/bitcoin-should-be-5-percent-your-investment-portfolio-fidelity