Addressing common concerns such as the impact of historical events like the Mt. Gox collapse, Celsius controversies, and government sell-offs, Kang argues that these factors pale in comparison to the potential demand flows into Bitcoin.
Andrew Kang, a partner at Mechanism Capital, predicted in a recent post on X that Bitcoin price is primed to surge to a new All-Time High (ATH) in the coming weeks, driven by a robust long-term demand flow ranging between $40 billion and $130 billion.
Kang’s Bullish Bitcoin ATH Projections
Kang’s forecast revolves around the perspective that Bitcoin price will not dwell below the $40,000 mark for long, anticipating a rise to the range of $50,000 to $60,000 within the current month, with the potential for a new All-Time High (ATH) by March. This bullish sentiment stems from his analysis of the substantial demand flows expected to permeate the Bitcoin market throughout the year.
Long term $BTC demand flows this year I approximate to be $40-130B+
One of the most common cardinal sins of crypto investors/traders is underappreciating the amount of wealth/income/liquidity in the world and its spillover into crypto. We hear stats about the market cap of gold,… https://t.co/9HhqxSE6s2 pic.twitter.com/9zFed3BJhP
— Andrew Kang (@Rewkang) February 12, 2024
Highlighting a common oversight among crypto investors and traders, Kang emphasizes the vast pool of wealth, income, and liquidity present globally, asserting that these resources have the potential to spill over into the crypto space. To put this into perspective, Kang conducts a rough demand sizing exercise, starting with the average annual income of US households, which stands at $105,000.
With 124 million households in the US alone, the aggregate annual income in the country amounts to a staggering $13 trillion. Extrapolating this globally, with the US contributing approximately 25% to the global GDP, yields a figure of around $52 trillion in aggregate income worldwide.
Taking into account that global crypto ownership averages around 10%, with higher percentages in certain regions such as the US (15%) and the UAE (25-30%), Kang estimates that even a conservative allocation of just 1% of individuals’ income into Bitcoin annually could translate to $52 billion in annual Bitcoin purchases globally, or approximately $150 million daily.
Bitcoin’s Price to Surge Above Challenges
Addressing common concerns such as the impact of historical events like the Mt. Gox collapse, Celsius controversies, and government sell-offs, Kang argues that these factors pale in comparison to the potential demand flows into Bitcoin. He contends that while traders and investors often focus on visible sell pressures, they overlook the size and scale of the buy-side flows, which continue to drive Bitcoin’s rise.
Furthermore, Kang anticipates that the recent approval of spot Bitcoin Exchange-Traded Funds (ETFs) will further increase demand, potentially reaching daily inflows of $100-200 million or more over the coming months.
Notably, the recent milestone of the spot Bitcoin ETF recording $403 million in net inflow on February 8 signifies the growing mainstream interest in crypto investment vehicles. Major players like BlackRock Inc (NYSE: BLK) and Fidelity Investments have each witnessed inflows exceeding $3 billion, with BlackRock projecting a total inflow of $150 billion to $200 billion over the next three years. Kang, however, noted that this demand surge predates the approval of Bitcoin ETFs, indicating sustained interest in Bitcoin.
As of now, Bitcoin is trading at $48,119, having reached an intraday high of $48,700 during the Asian trading session this morning. With favorable market conditions and growing institutional adoption, analysts remain optimistic about Bitcoin’s prospects for reaching new all-time highs in the coming weeks and months.