Lets say as an example the marketcap of bitcoin is $500bn and then $500bn from institutions gets invested into bitcoin in a short space of time, the market cap of bitcoin then won't neccessarily be only $1tn, it could be way higher. It would only be $1tn if the price of btc was 2x'd by all this money coming in. Price per bitcoin is set on the margin on exchanges by the market participants who are wanting to buy and sell. That much inflow will likely more than 2x the price of bitcoin surely given how little is on exchanges these days. Look what only $1.5bn from Tesla did to the bitcoin price in 2021, it definitely increased the market cap by more than $1.5bn.
That is a great breakdown and one reason I love your newsletter. Simplicity💪
Lets say as an example the marketcap of bitcoin is $500bn and then $500bn from institutions gets invested into bitcoin in a short space of time, the market cap of bitcoin then won't neccessarily be only $1tn, it could be way higher. It would only be $1tn if the price of btc was 2x'd by all this money coming in. Price per bitcoin is set on the margin on exchanges by the market participants who are wanting to buy and sell. That much inflow will likely more than 2x the price of bitcoin surely given how little is on exchanges these days. Look what only $1.5bn from Tesla did to the bitcoin price in 2021, it definitely increased the market cap by more than $1.5bn.