On Feb. 12, Mechanism Capital partner Andrew Kang predicted that long-term Bitcoin demand flows this year would be between $40 billion and $130 billion.
There is a huge amount of global wealth and income that could potentially flow into crypto, he said, stating that the global aggregate income is around $52 trillion.
Current crypto ownership is around 10% globally. Even if crypto owners only allocate 1% of their income to digital assets annually, that’s still $52 billion flowing into the asset class per year and $150 million per day, he added.
Huge Bitcoin Inflows Expected
These estimates are conservative, he continued, as allocation is likely higher than 1% for many true believers, and business or institutional flows aren’t included.
Moreover, major sell flows like Mt.Gox and miner emissions are dwarfed by estimated buy flows. ETF inflows will further boost demand, and recent inflows have exceeded even the upper bounds of estimates.
The total inflow so far for all ETFs is $2.65 billion, according to Farside. This is the aggregate, which includes the Grayscale outflows, now beginning to slow. Both BlackRock and Fidelity have had more than $3 billion inflows each.
BlackRock themselves estimated an inflow of $150 billion to $200 billion over the next three years.
“People seem to forget that there has been massive consistent demand for Bitcoin even before these ETFs were approved.”
Long term $BTC demand flows this year I approximate to be $40-130B+
One of the most common cardinal sins of crypto investors/traders is underappreciating the amount of wealth/income/liquidity in the world and its spillover into crypto. We hear stats about the market cap of gold,… https://t.co/9HhqxSE6s2 pic.twitter.com/9zFed3BJhP
— Andrew Kang (@Rewkang) February 12, 2024
He predicted that Bitcoin’s price will not spend much time below $40,000 and will rise to between $50,000 and $60,000 this month, hitting a new all-time high by March.
Previous ATH Pre-Halving
On Feb. 11, Bitcoin analyst Jamie Coutts also predicted that BTC “has the potential to reach previous all-time high pre-halving.”
All the extreme leverage and positioning from the fourth quarter has been cleansed for now, he stated. Moreover, options open interest is down 40%, and futures funding rates are “still positive but less exuberant.”
“ETFs continue to outpace supply by at least 2:1 and the halving is still months away.”
The final bullish factor is that only 10% of the volume moved at prices above the current level. “If BTC breaches $48.2k, there is scant overhead resistance,” he said.
🚀Why this #Bitcoin rally has the potential to reach prev ATH pre-halving;
1. All the extreme leverage and positioning from Q4 has been cleansed (for now). Options OI is down 40%, and Futures funding rates are still positive but less exuberant
2. ETFs continue to outpace… pic.twitter.com/zP9nYraSyF— Jamie Coutts CMT (@Jamie1Coutts) February 10, 2024
Bitcoin is currently trading at $48,100 after hitting an intraday high of $48,700 during the Monday morning Asian trading session.
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