Analysts Say $127.3 Trillion Liquidity Surge Could Be Rocket Fuel for Bitcoin

Digital asset investment firm CoinShares predicts a potential surge in Bitcoin‘s BTC/USD value, suggesting a 65% increase if the cryptocurrency captures a small portion of the global liquidity and gold’s market cap.

What Happened: CoinShares’ report posits that Bitcoin could experience a significant rally if it manages to seize just 2% of the global liquidity (global M2) and 5% of gold’s market cap.

The predictions are based on the total addressable market (TAM) model, a tool used to estimate the maximum market opportunity available to a product or service. In this case, the model is applied to Bitcoin, assuming it can capture the entire market.

The report states, “If you believe bitcoin is unlikely to compete with the cash positions of Corporate Treasuries or FX Reserves (assigning them 0%) but more likely to take a share of Global M2 (let's assume 2%) and Gold (5%), the sum of those contributions would estimate a value of $189,000/BTC.”

Currently, the global liquidity (global M2) is valued at $127.3 trillion, while the total market cap of all the mined gold is $23.9 trillion.

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CoinShares suggests that Bitcoin is “increasingly likely to obtain a higher share of monetary markets” as it evolves into a “more useful form of money.”

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"Bitcoin does not need to replace the global monetary system to be profoundly valuable. Capturing a small share of these enormous markets would be more than enough," the report adds.

This prediction comes at a time when Bitcoin and other cryptocurrencies are gaining traction as alternative investment options.

The potential for Bitcoin to capture a portion of the global liquidity and gold’s market cap could significantly impact its value, making it an attractive option for investors.

The report’s findings underscore the growing recognition of Bitcoin’s potential in the financial market.

At the time of writing, Bitcoin was trading at $113,352.03.

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