Bitcoin Could See A $20B Market Cap Boost From $1 Billion BTC Reserve Purchase, Says Analyst: 'Could Have Bigger Surges This Year If Central Banks Really Get Involved'

Sygnum Bank‘s Head of Investment Research, Katalin Tischhauser, predicted that a strategic Bitcoin reserve purchase of $1 billion could potentially trigger a $20 billion surge in Bitcoin‘s BTC/USD market cap.

What Happened: In a recent interview with The Block, Tischhauser explained that the increase in Bitcoin’s market capitalization will result from direct capital inflows and a substantial upward price surge.” Each $1 billion of strategic reserve purchases could drive a 20x multiplier effect on Bitcoin’s market cap,” she said.

She also highlighted that the projected $19 billion increase in the multiplier would stem from a surge in demand and the strain on Bitcoin’s already scarce liquid supply. “The potential demand shock will be so significant because the liquid supply of Bitcoin is really very small,” Tischhauser added.

Tischhauser stated that the net rise in demand could stem from multiple sources, such as state and local governments, major institutional investors, and possibly corporate treasuries. She also noted that an expanding stablecoin market cap usually signifies an influx of funds into the crypto market.

“The 20x multiplier is based on what we saw during the surges in inflows in 2024. But we could have bigger surges this year if central banks really get involved,” Tischhauser concluded.

SEE ALSO: Peter Thiel-Backed Crypto Exchange Reportedly Plans IPO In 2025 Amid Bitcoin And Digital Currency Boom

Why It Matters: The prediction by Tischhauser comes in the backdrop of President Donald Trump‘s support for a Bitcoin Reserve Act, which is expected to pass through the Senate during his second term. The Act, introduced by Republican Senator Cynthia Lummis, would direct the US Treasury to sell gold certificates, buy Bitcoin, and hold it for twenty years. This move has already seen Bitcoin’s price skyrocket by more than 40% following Trump’s election victory.

Furthermore, Geoffrey Kendrick, Head of Digital Assets Research at Standard Chartered, predicts that Bitcoin could reach $500,000 before the end of Trump’s term due to improved investor access to Bitcoin under the current administration and a gradual decline in volatility due to maturing market infrastructure.

However, the cryptocurrency market witnessed declines yesterday, with Bitcoin briefly dipping below $97,000 following remarks from Federal Reserve Vice Chair Philip Jefferson, who urged caution regarding interest rate cuts in the current economic environment.

• READ MORE: Ethereum Below $3,000: What Does Technical Analysis Say?

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.