If JPMorgan is right, the implications are staggering: contrary to expectations that bitcoin’s market cap is a rough reflection of its inflows, JPM’s calculations reveal that a mere $6 billion in net inflows since 2009 has resulted in a market cap of $330 billion. This goes to what Mike Novogratz said last week when he said that cryptos are unique, because unlike all other asset classes, there is no corresponding increase in supply when prices surge.
This also means that as new capital flows into the crypto space as more retail and institutional investors scramble for “a piece of the pie”, the potential market cap gains are unprecedented.
Putting this number in context, so far in 2017, there has been $283BN in global equity inflows ($402BN in ETF inflows and $120BN in mutual fund outflows), and $346BN in bond inflows, as this BofA table reveals:
If only a fraction of these institutional and retail flows were redirected toward bitcoin, then the next, and even more parabolic leg higher would be upon us, inviting even more bubble comparisons, even more skeptics and even more converts… just like none other than Jamie Dimon humself. In other words, shorts, beware, especially now that shorting – and short squeezes – is about to get much easier thanks to bitcoin futures.
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