Digital asset bank, Sygnum, predicts a substantial surge in Bitcoin’s market capitalization if a $1 billion Strategic Bitcoin Reserve purchase materializes. This projection comes from Katalin Tischhauser, the Head of Investment Research at Sygnum.
In her discussion with The Block, Tischhauser posits that for every billion-dollar inflow from the potential U.S. strategic bitcoin reserve, a multiplier effect could ensue, significantly bolstering the market capitalization of the digital asset. She believes that each billion-dollar strategic reserve purchase could catalyze a 20-fold increase in Bitcoin’s market cap.
The extra $19 billion in the multiplier forecast, Tischhauser explains, would stem from the subsequent demand shock and a squeeze on Bitcoin’s already scarce liquid supply. She attributes the potential for such a dramatic increase not just to the direct capital inflow but also to an anticipated steep rise in price.
Bitcoin’s limited liquid supply could be a catalyst for exponential growth. Tischhauser suggests that the potential demand shock would be quite substantial given the limited liquid supply of Bitcoin. The finite supply, combined with new capital entering the market, could prompt a swift price escalation. This pressure is expected to intensify as the market absorbs early inflows, leaving even less Bitcoin for future demand.
She further emphasizes that the net increase in demand could come from several sources: state and local governments looking for reserve assets, large institutional investors, and possibly, corporate treasuries. All of these could contribute to the combined net demand, triggering a “market stampede” and the multiplier effect.
Tischhauser also cites the growth in the stablecoin market cap as a potential indicator of funds flowing into the crypto market. She concludes by highlighting that the multipliers observed during the 2024 inflows have set the stage for these predictions, hinting that this year could see even bigger surges if central banks get more actively involved.
Disclaimer: The Block is an independent news organization that provides crypto industry news, research, and data. Foresight Ventures, a majority investor of The Block, invests in other crypto companies, including crypto exchange Bitget. The Block remains committed to delivering objective, impactful, and timely information about the crypto industry. This article is purely informational and not intended as financial advice.
