It's an assumption that new capital inflows have a 3x multiplier on the market cap.
For example, if another $540b (current market cap) of capital sought a home in bitcoin, bitcoin's unit price would 4x & not merely double.
It's a conservative number & based on new capital entering slowly. If there's a rush on bitcoin, it's likely the multiplier is much higher (at least until price 'corrects').
Thank you for that explanation. Why does $1 in capital equate to $3 increase in MCap ? Is it also true to the downside
Supply & demand.
Yes - there are similar effects on the way down.
Bitcoin is the only resource that has a purely inelastic supply & so all supply for new demand must come from existing stock. Most resources don't have a multiplier this high over long timeframe since production can be increased.
Plus with all the exchange collapses last year, self custody/not rehypothicating is top of mind. Less paper bitcoin suppressing price. It’s bearish, btc is going to explode to the upside
Being early can feel a lot like being wrong.
My greatest regrets have come from giving up too early.
So long term hodlers refusing to sell creates a multiplier on new capital coming in . Thank you
Exactly!
Except it’s not an assumption, it’s the mathematical reality of a finite scarce asset, becoming infinitely more scarce.
This chart shows that the average multiplier for BTC has was 2.6X over the past 5 years.
I explain more in this video, where I run the numbers on multiple hypothetical scenarios. https://m.youtube.com/watch?v=vaVUC2Kq-sE 
There's an assumption that what has happened in the past will also happen in the future.
As more people understand Bitcoin better, the ability to meet new demand from existing supply is hampered.
I would expect that the multiplier effect only increases with time & bitcoin adoption.
∞ / 21M
Agreed! That was the argument I made in this video. https://youtu.be/vaVUC2Kq-sE
