October 7, 2024
Bitcoin

Bitcoin Needs Equivalent of 1% of Global Wealth Assets To Hit $1,000,000, According to Analyst Willy Woo


Popular on-chain analyst Willy Woo says Bitcoin (BTC) just needs a fraction of the capital stored in global wealth assets to reach a seven-figure price tag.

Woo tells his 1.1 million followers on the social media platform X that Bitcoin needs inflows of $5 trillion to move its price to $1 million.

According to the analyst, the figure equates to roughly 1% of global wealth assets.

He also notes that $620 billion has been invested in Bitcoin so far, and he outlines how he calculated the $5 trillion number.

“1) What’s the market cap need to be at $1 million? Assume that it’s happening soon so the circulating supply is 19.8 million coins so $19.8 trillion market cap.

2) What will the multiplier be between capital invested and market cap? This is a measure of the liquidity conditions, the deeper the liquidity, the lower the multiplier.

3) This metric is known, it’s called MVRV (market value to realized value) Ratio. It was 8x in the 2013 top, 4.8x in the 2017 top, 4.0 in the 2021 top. Based on this historic liquidity trend, we can expect the next top to be a 3.5x multiplier, if we hit $1 million in the cycle after this, then the multiplier will be even less given the trend in deeper liquidity making it harder to move price per dollar invested. So I’ll use 3.5x to be conservative on capital needed.

4) $19.8 trillion / 3.5 = $5.66 trillion needs to be stored in the network. This metric is called Realized Capitalization. Since the blockchain records every wallet with a time signature, we can estimate the price paid as it enters a wallet. Realized Cap needs to get to $5.66 trillion.

5) Since Realized Cap is only $620 billion today, we need it to climb a further $5 trillion to reach our target.”

The analyst says he doesn’t think BTC will reach that $1 million price target in the ongoing cycle due to the significant amount of capital required.

BTC is trading at $63,128 at time of writing, down over 1% on the day.

Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox

Check Price Action

Follow us on X, Facebook and Telegram

Surf The Daily Hodl Mix

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: DALLE3





Source link

Leave a Reply

Your email address will not be published. Required fields are marked *