Will the $1 trillion market capitalization become the end of Bitcoin? No, this is just the beginning
“If we combine all potential demand with limited supply, we will come up with an incredible long-term number. We are just getting started, and $1 trillion (the current market value of Bitcoin) is nothing compared to the final result.”
This is a speech by Cathie Wood, a “stock goddess”, at a panel discussion at the Chicago Board of Options Exchange (CBOE) recently.
From Wood’s speech, we can see that she has great confidence in the rise of Bitcoin. Her confidence is not without basis. According to the data held by Ark Investment Management Company (i.e. Wood’s investment company), they found that many companies are currently using Bitcoin to diversify their cash assets. This also means that institutional investors are stepping up efforts to promote the rise of this Bitcoin bull market. Therefore, Wood predicts that Bitcoin is likely to enter the golden stage of development.
Recently, Bitcoin has entered a high-level of shock phase. The currency price has been fluctuating between 50,000 and 60,000 dollars. Since the last time Bitcoin broke through US$60,000, it has quickly fallen back to around US$50,000. Despite the recent rebound in the market, the price of Bitcoin still has not exceeded US$60,000.
Although Bitcoin does not give us much surprises in price, we can still see a different picture from the holding address.
Today Glassnode announced a new phase of data on the Bitcoin chain. From these data, we can see that Bitcoin is likely to bring surprises to investors in the future.
Let’s first look at the relationship between the price of Bitcoin and the amount of open interest in the past six months.
Six months ago, the price of Bitcoin was at US$10,800. Three months ago, the price of Bitcoin had risen to US$26,600. A month ago, the price of Bitcoin was US$47,700. The data shows Bitcoin has been rising vigorously recently.
So, will investors who bought bitcoin sell it in the market immediately? The answer is no. This is because from another set of data, we found that the number of bitcoins in the current exchange is rapidly decreasing. This also means that a large amount of Bitcoin is flowing from exchanges into the long-term cold storage wallets. Within the past 12 months, more than 3.27% of BTC has been transferred from exchanges to third-party wallets.
If we further refine this data, we will find that only two exchanges, Binance and Gemini, have seen an increase in their bitcoin stocks last year, adding a total of 270,000.
While exchanges such as Bitfinex, Bittrex, Bitstamp, OKex, Kraken, Houbi, Coinbase, etc., have all experienced outflows of Bitcoin to varying degrees, with a total outflow of 616,000. This data shows that current investors are more inclined to invest Bitcoin in the medium and long term rather than short-term.
In summary, new investors are still buying bitcoin in large quantities at this stage, and they have no plans to sell in the short term. This has laid a solid foundation for the continued rise of Bitcoin prices. Therefore, Wood made such a confident prediction: Bitcoin with a market value of US$1 trillion is just the beginning.