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Is $100,000 Bitcoin Possible? Analyst Breaks Down Major Catalysts
- Crypto analyst Axel Bitblaze examines whether the necessary liquidity and catalysts are in place to propel Bitcoin to $100,000, emphasizing the fundamental role of liquidity in the crypto market.
- Stablecoins comprise a cornerstone of the analysis, with the total market capitalization of stablecoins surging to $173 billion, reaching its highest level since the collapse of TerraUSD.
- FASB rule change is another significant factor as under the new guidelines, public companies will be able to report the fair value of their Bitcoin holdings based on market prices at the end of the reporting period.
- Bitblaze suggests that the upcoming FASB rule change could incentivize more corporations to adopt Bitcoin as part of their balance sheets, as it presents itself as an attractive inflation-resistant alternative.
- Expanding M2 money supply is also a significant catalyst that can propel Bitcoin's price higher. 'For every 10% increase in M2 money supply, BTC pumps 90%,' says Bitblaze.
- Since Nov 2021, money market funds have grown to $6.5 trillion, but with the Fed initiating rate cuts and more to come, investors are expected to seek higher returns in riskier assets such as Bitcoin and other cryptocurrencies.
- Bitblaze aggregates the available liquidity sources to quantify the potential inflow, which brings the total to approximately $103.17 trillion, 43 times the current total crypto market capitalization.
- Bitblaze concludes by saying 'For a $200 Billion inflow, only 0.19% of this account needed to enter crypto. For those who think this isn’t possible and 200B is too much, BTC ETFs had over $20B in net inflows despite sideways price action, no rate cuts, and no QE.'
- At press time, BTC traded at $66,944.
- The surge in the price of Bitcoin is likely to be fueled by an increasing level of liquidity, led by growing demand for stablecoins.
- Crypto analyst Axel Bitblaze cites four essential factors, including stablecoins, FASB rule change, expanding M2 money supply and shift from money market funds to Bitcoin that can propel Bitcoin to such heights.
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