Mechanism Capital's Andrew Kang took to social media on Sunday, Feb. 11, to project substantial demand flows into Bitcoin BTC/USD.
Long-term Bitcoin demand flows for 2024 will be in the $40 billion to $130 billion range, he predicts. And "underappreciating" the amount of global wealth with the potential to spill over into the cryptocurrency sector is "one of the most common cardinal sins of crypto investors/traders." See below.
Long term $BTC demand flows this year I approximate to be $40-130B+
— Andrew Kang (@Rewkang) February 12, 2024
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
"True believers" put in 50% or more into Bitcoin, raising the average allocation to possibly 3-5%.
Allocations from businesses and funds are not included and on a "similar order of magnitude."
These buy flows "dwarf all of these sell flows put together," Kang explained, pointing to Mt. Gox unlocks, miners selling and seized bitcoin as potential sell pressure.
'Good Chance' This Bull Cycle Is 'The Largest' Thus Far
Meanwhile, Cryptoquant CEO Ki Young Ju noted the significance of Bitcoin spot ETFs, which conduct settlements on-chain daily, adding a layer of transparency and trust to the market.
Young Ju also brought attention to the resilience of Bitcoin investors from the 2021 bull cycle, who are now nearing the break-even point, commending their patience and long-term commitment.
Syncracy Capital's Daniel Cheung further bolstered the optimistic sentiment, predicting this bull cycle could be the largest in terms of market cap creation and duration.
Good chance this bull cycle ends up being the largest in terms of market cap creation and longer in duration than expected:
— Daniel Cheung (@HighCoinviction) February 12, 2024
1) First time the crypto bull market has aligned with the start of a Fed easing cycle
2) Market remains in a "buy the dip" mentality absent a severe macro…
Cheung pointed to several factors, including the alignment with the Fed's easing cycle, a sustained "buy the dip" mentality and increased institutional buy-in from large consumer enterprises.
Cheung also highlighted the emergence of new narratives within the crypto space, such as DePIN, Crypto and AI, and Real World Assets (RWAs), which could drive wealth creation.
Additionally, he mentioned the constructive regulatory landscape following BlackRock Inc.'s entrance into the market and the clearing of bad actors from the previous cycle. Cheung is "feeling optimistic for the next 12 to 24 months."
Also Read: Copycat Crypto: Can You Mirror Your Way To Millions?
No Bitcoin Super Bowl Commercials? 'Still Early'
Bob Loukas, a positional trader and investor, pointed out the absence of Bitcoin or crypto commercials during Super Bowl LVIII, suggesting that despite the growing interest and investment in cryptocurrency, the market is still in its early stages.
No #bitcoin #crypto Super Bowl commercials.
— Bob Loukas 🗽 (@BobLoukas) February 12, 2024
Still early.
Adding together Kang's analysis and the curious absence of interest from retail investors, many analysts think this bull cycle is still in its early stages.
"Really, what is the bear argument here?" Kang asked.
The next 12 to 24 months will show whether the strong belief in Bitcoin's continued upward trajectory, further supported by the recent ETF inflows was warranted.
Image: Pixabay
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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