Mechanism Capital partner Andrew Kang projected long-term Bitcoin demand flows for the year between $40 billion and $130 billion, highlighting the substantial global wealth and income poised to enter the crypto sphere. With global aggregate income estimated at around $52 trillion and current crypto ownership standing at approximately 10% globally, even a modest 1% allocation of income to digital assets annually could translate to $52 billion flowing into the asset class each year, amounting to $150 million per day.
These estimates, Kang emphasized, are conservative, as many enthusiasts likely allocate more than 1% of their income to crypto, and institutional or business flows are not factored in. Additionally, significant sell flows such as those from Mt. Gox and miner emissions pale in comparison to estimated buy flows, further indicating a potential influx of wealth into BTC.
The recent surge in ETF inflows, exceeding even the upper bounds of estimates, adds to the bullish sentiment. ETF inflows totaling $2.65 billion, including significant investments from BlackRock and Fidelity, suggest robust demand. BlackRock projects an inflow of $150 billion to $200 billion over the next three years, underlining sustained demand for Bitcoin even before ETF approvals.
Kang predicts Bitcoin’s price will hover above $40,000, potentially rising to $50,000 to $60,000 this month and hitting a new ATH by March.
Echoing this sentiment, Bitcoin analyst Jamie Coutts foresees BTC potentially reaching its previous ATH before the halving. With extreme leverage and positioning from the fourth quarter now cleansed, reduced options open interest, and futures funding rates showing less exuberance, bullish momentum builds. ETFs consistently outpacing supply by at least 2:1 and the halving still months away further contribute to the positive outlook.
Additionally, only 10% of the volume has moved at prices above the current level, indicating limited overhead resistance. Coutts suggests that breaching $48.2k would encounter minimal resistance, potentially clearing the path for further gains.
Bitcoin is currently trading at $48,100 after reaching an intraday high of $48,700 during the Monday morning Asian trading session.