In a statement via The memo heralded the start of a new era for Bitcoin, likening its current trajectory in financial markets to an “Initial Public Offer” (IPO) moment, signaling a major shift in price discovery mechanisms for the cryptocurrency.
Bitcoin’s IPO moment
Hougans memo elaborates on the seismic shift within the Bitcoin investment landscape, stating: “Previously, only a fraction of the world’s investors had access to Bitcoin – primarily self-directed retail investors and technologists. That group pushed the price above $40,000. Thanks to ETFs, every investor in the world – financial advisors, family offices, institutions, endowments and others – now has access to Bitcoin.” This transition has been likened to “going from ten normal people bidding on a house to a hundred very wealthy people bidding on a house in the blink of an eye,” causing the price to naturally increase.
Highlighting the magnitude of this shift, the memo reads: “It’s as if Bitcoin has had its IPO and the market is now finding its true price,” underscoring the transformative impact of ETFs in democratizing access to Bitcoin for a global group of investors . With the world’s asset managers holding approximately $115 trillion in capital, a modest 1% allocation to Bitcoin could result in more than $1 trillion in buying pressure, a figure roughly equal to Bitcoin’s current market cap.
The memo also draws attention to the critical role of long-term Bitcoin holders in this new era of price discovery. Because Bitcoin ETFs acquire more than the total new supply generated by miners, the decision of these long-term holders to sell or hold could significantly impact market dynamics. Hougan notes, “Nearly 70% of all bitcoin has not moved in a year,” indicating a robust investment pattern among investors, which could set the stage for price escalations as demand continues to rise.
To further strengthen Bitwise’s bullish outlook, Ryan Rasmussen, a researcher at the company, provided a tangible price target during a Yahoo Finance interview. He confirmed: “We think Bitcoin will definitely reach record highs in 2024… We still stand by that prediction. […] That previous price was around $69,000, but we don’t think it will stop there. We will see at least a 10-15% increase from all-time highs […] That would get us to it […] $88,000, and I still stand by that despite all the excitement in the market.”
“What we ultimately see is crypto rising from the ashes of the 2022 market,” says Bitwise. @RasterlyRock says about the crypto rally. “We think we are in a multi-year bull cycle and all elements of the crypto space will certainly have their moment.” pic.twitter.com/Fj1ohKUwjS
— Yahoo Finance (@YahooFinance) February 26, 2024
These projections and analyzes from Bitwise leadership highlight a consensus view of Bitcoin entering a breakthrough phase of price discovery. The story of Bitcoin’s ‘IPO moment’, coupled with expanded investor access through ETFs and the fortitude of long-term holders, provides a compelling forecast of growth and new price benchmarks for the world’s leading cryptocurrency.
At the time of writing, BTC was trading at $
Featured image created with DALL·E, chart from TradingView.com
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