In summary:
- Big money in the form of hedge funds, university endowments and pension funds are ready to invest in Bitcoin.
- However, these institutions have governing charters that prevent them from investing in crypto directly.
- Investment products pegged to BTC provide an avenue for these institutions to access Bitcoin.
- Bitcoin need only capture 33% of Gold’s current market cap at $9T to be valued at $180k.
Talk of institutional investors getting into crypto gathered momentum back in mid-2017 when news hit the internet that the CME Group and CBOE would start offering Bitcoin futures contracts by December of 2017. Right around the same time the derivatives product went live, BTC hit its all-time-high value at around $20,000 as investors became bullish on the possibility of big money flowing into Bitcoin.
Hedge funds, University endowments and Pension Funds are ready to invest in Bitcoin
The team at Weiss Ratings has further expanded on the topic of ‘big money’ investing into Bitcoin by pointing out that hedge funds, university endowments and pension funds are ready to invest in BTC. The only hurdle is that these institutions have governing charters that do not allow them to invest directly in cryptocurrencies.
However, SEC-registered crypto funds such as Grayscale, have opened the doors to the investment of Bitcoin through products such as the Grayscale Bitcoin Trust (GBTC) shares which are easily available at the stock market. The team at Weiss further points out that a majority of Grayscale’s clients are the said institutional entities.
Roughly 88% of GBTC shareholders are big banks, hedge funds, and big-foot professional investors. That makes money flowing into it is one of the best indicators of institutional interest in cryptocurrencies.
Bitcoin can Capture a Third of Gold’s Market Cap
Weiss Ratings went further to point out that the availability of Bitcoin investment products such as GBTC is similar to what happened with Gold when gold ETFs (Exchange Traded Funds) opened the doors for investors to buy the commodity at the stock market. As a result, the value of Gold quadrupled in Seven years.
Such a feat can be replicated with Bitcoin but it will take some time. Bitcoin, like Gold, is scarce but more accessible and concealable than the precious metal. Consequently, Bitcoin will catch up as safe-haven asset and if BTC can capture 33% of Gold’s market cap, it could be valued at approximately $180,000.
Well, if Bitcoin captures only a third of gold’s safe-haven business, it’s going be trading near $180,000 — roughly a 20-fold increase from present levels.
Bottom line: If you think unlimited money-printing is going to send safe-haven assets blasting up — which is clearly what GBTC and Paul Tudor Jones are betting on — Bitcoin is the one safe-haven asset with the most profit potential.