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.
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How Bitcoin Could Surge 500% Amid Rising Institutional Adoption
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.
Why does this matter? Read on… (1/6)
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:
Estimates suggest that the fiat amplifier is anywhere from two to 25 times, depending on what phase of the market cycle cryptocurrencies are in.
Thoughts on #Bitcoin allocation…
In periods where investors are expecting upside, the fiat amplifier grows as investors don’t want to sell their coins too early.
“9 companies alone in the S&P 500 are sitting on close to 0 billion in cash and short term investments. 5% of that moving into #Bitcoin (or billion) would likely 5x the price of Bitcoin given the lack of sellers. (3/6).”
Barhydt’s analysis of the institutional adoption situation comes as he is seeking to increase his personal exposure to Bitcoin. As reported by Bitcoinist previously, he said that he is “considering doubling the allocation of #Bitcoin in my personal portfolio to 25%.”
Boosting Exposure to BTC
I’m considering doubling the allocation of #Bitcoin in my personal portfolio to 25%. Is this a good idea or is this allocation too high? (Thread…)
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 .
— Bill Barhydt (@billbarhydt) October 2, 2020
Investors think that further institutional adoption of the cryptocurrency could result in prices going parabolic.
— Bill Barhydt (@billbarhydt) October 13, 2020
At least 4% of #Bitcoin (probably more) is now locked up in long term holdings by institutional investors.
Explaining why he thinks this is a good idea, he pointed towards inflationary trends:
If you don’t get what’s about to happen then you’re just not paying attention.
“Given the acceleration of currency inflation and the likely price inflation to follow this seems like a better weighting than my current 12%.”
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