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Despite Bitcoin’s correlation to the stock market throughout the past several months, the cryptocurrency has been widely garnering adoption as a safe haven asset.
Individuals and corporations have been turning to the cryptocurrency to protect against potentially imminent inflation due to rampant USD printing.
Most recently, multi-billion-dollar tech giant Square announced that they had acquired $50 million worth of BTC to hold on their balance sheet as a reserve asset.
Months before Square’s announcement, MicroStrategy divulged a detailed plan to convert their entire USD treasury – worth hundreds of millions – into Bitcoin.
Despite this trend, one Bitcoin critic is ardent in his belief that there is no herd coming to buy BTC, and that the fabled “herd” of buyers is already here.
One on-chain analyst, however, notes that once Bitcoin passes a $1 trillion market cap, institutions will consider it an asset bucket rather than an inflation hedge and begin directing significant amounts of capital towards it.
Peter Schiff: Bitcoin’s Growth Trajectory Limited as It Runs Out of New Investors
Prominent gold bug and Bitcoin critic Peter Schiff recently threw a wet towel over the notion that a herd is coming to Bitcoin with a massive amount of capital that will drive it higher.
He believes that the capital sources that many investors hope will lift BTC higher are already exposed to BTC, which means that there may not be any imminent sources of capital to push the crypto higher.
“The herd that’s coming isn’t the problem. If fact, the herd is already invested. The problem will arise when the herd tries to exit? So far these larger buy orders have propped up the market enabling others to get out. What happens when selling picks up without new large buyers?”
On-Chain Analyst: Once BTC Passes a $1 Trillion Market Cap, New Money Will Flood In
While countering Schiff’s point, one prominent on-chain analyst stated that a $1 trillion market cap is the threshold that Bitcoin needs to pass before seeing a flood of new capital from institutional players.
He contends that this market cap will transform their perception of Bitcoin from being a hedge to becoming an asset bucket.
“$5T sits in corporate treasuries, very roughly $2.2b deployed by unannounced investors in 8 months (try seeing that with gold). The herd has not even begun. Bitcoin past $1T, institutional funds will consider it an asset bucket, not just a hedge and will suck value out of Gold.”
A continued trend of individuals and companies adding BTC to their portfolios should be enough to reach this threshold.
Featured image from Unsplash.
