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Bitcoin is the best-performing macro asset of 2020, hands down. From the start of the year, the coin is up around 150%. And since the March lows, the leading cryptocurrency has gained around 450%.
But analysts think that institutional influence in the space will drive the market even higher.
The Institutional Influence on Bitcoin Will Grow as Bull Case Becomes Clear
Paolo Ardoino, CTO at Bitfinex, recently said that he thinks the extremely apparent Bitcoin bull case will force asset managers to allocate time and capital to this space:
“No amount of cynicism, disbelief or even fantastical thinking can obscure the compelling case for Bitcoin,” he said. “Global asset managers will continue to recalibrate their portfolios accordingly.”
Many others in the space have made this assertion, stating how the current macro environment makes not holding BTC almost irresponsible.
What is the Bull Case?
The Bitcoin bull case is believed to be largely related to the vast amount of monetary inflation taking place and the loss of dominance in the U.S. dollar.
As Paul Tudor Jones wrote in his famous research note/investor letter highlighting Bitcoin:
“One thing that piqued my interest from this list of assets, and that one day might be broughtto prominence by the GMI, is Bitcoin. Truth in advertising, I am not a hard-money nor a crypto nut. Iam not a millennial investing in cryptocurrency, which is very popular in that generation, but a babyboomer who wants to capture the opportunity set while protecting my capital in ever-changingenvironments. One way to do that is to make sure I am invested in the instruments that respond firstto the massive increases in global money. And given that Bitcoin has positive returns over the mostrecent time frames, a deeper dive into it was warranted.”
Bitcoin is expected to play an increasingly important role in the portfolios of global investors, both on a retail and institutional level.
It is believed that the cryptocurrency’s supply cap and its relative sovereignty relative to other store of value investments will make it extremely valuable in the years ahead.
Many in the Wall Street space have made this assertion over recent weeks, stating that they actually think BTC ousts gold in many aspects. Though, how much BTC will outperform gold by remains to be seen.
Some think that in this market cycle, Bitcoin’s market capitalization could surmount that of gold. For instance, the Winklevoss Twins from Gemini recently said on CNBC that they think Bitcoin could surmount gold’s market capitalization, which would price BTC at $500,000.