As of late Thursday, bitcoin was trading just north of $43,000. That indicates a near-term rise in the order of 10x, 20x or more is highly unlikely.
But that’s exactly what one market observer believes will happen. In a recent interview with Spanish-language news channel Negocios TV, JAN3 CEO Samson Mow said the “multiplier effect” could take the largest digital currency to $1 million in a matter of weeks.
It’s hard to imagine that outlook coming to fruition. After all, a run to $1 million from $43,000 would require the cryptocurrency to appreciate by more than 23x. Still, Mow’s bullish view on the the digital currency could be pertinent to investors evaluating the new spot exchange traded funds. Those include the Invesco Galaxy Bitcoin ETF (BTCO), the VanEck Bitcoin Strategy ETF (XBTF) and the WisdomTree Bitcoin Fund (BTCW).
Inside Mow’s Outlook
Perhaps not surprisingly, Mow sites the debuts of BTCO, BTCW, and XBTF and the seven other such spot ETFs as catalysts to reduce the supply of the cryptocurrency. Experienced crypto investors know that supply is fixed, to a maximum of 21 million coins mined.
The new spot ETFs are acting as accumulators of the digital currency. With the April halving, which will make mining more difficult, right around the corner, those ETFs could benefit from favorable supply/demand dynamics.
“We talk often about a supply crunch, a supply shock. And that’s because there’s not much bitcoin available to buy between thousands of exchanges around the world,” said Mow. “Maybe there’s a million, 2 million bitcoin available for purchase. There’s probably $10 (billion), $20 billion of capital that’s going to flood in right away. That’s going to go into this small supply of available bitcoin.”
For investors considering the likes of BTCO, BTCW, and XBTF as plays on the April halving, there could be merit in that thesis. That validity could stoke accumulation of those ETFs and peers ahead of the halving.
“We’ve never had a bitcoin halving on the horizon where we have a diminishing supply of bitcoin on the open market,” added Mow. “Every other bitcoin halving, we have seen an increase of bitcoin coming onto the market despite the fact that supply flow would be cut in half.”
The digital currency may not run to Mow’s forecast of $1 million over the coming months. But there’s arguably a bull case for the cryptocurrency.
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