Subnostr

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').

₿TC-G 2y ago

Thank you for that explanation. Why does $1 in capital equate to $3 increase in MCap ? Is it also true to the downside

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Discussion

Brisket 2y ago

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.

rand0mguest2 2y ago

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

Brisket 2y ago

Being early can feel a lot like being wrong.

My greatest regrets have come from giving up too early.

₿TC-G 2y ago

So long term hodlers refusing to sell creates a multiplier on new capital coming in . Thank you