Bitcoin’s Market Cap Could Surge with U.S. Strategic Reserve Inflows, Says Sygnum’s Katalin Tischhauser
A potential U.S. strategic bitcoin reserve could trigger a significant multiplier effect on the cryptocurrency’s market capitalization, according to Katalin Tischhauser, Head of Investment Research at Sygnum. Speaking with The Block, Tischhauser outlined how each $1 billion in inflows could amplify bitcoin’s total market cap by as much as $20 billion, driven by both direct investment and an ensuing price shock.
“Each $1 billion of strategic reserve purchases could drive a 20x multiplier effect on bitcoin’s market cap,” Tischhauser explained, attributing the phenomenon to both demand pressure and bitcoin’s inherently limited liquid supply.
Bitcoin’s Scarcity Could Exponentiate Price Growth
A key factor in this projection is bitcoin’s scarcity, particularly its small liquid supply. As large-scale institutional or governmental capital flows into bitcoin, the available supply diminishes rapidly, triggering a sharp price increase.
“The potential demand shock will be so significant because the liquid supply of bitcoin is really very small,” Tischhauser noted.
She further detailed how initial inflows might consume much of the available supply, with subsequent investments encountering an even tighter market—intensifying price increases.
“The first and second billion dollars will largely burn through available liquidity,” Tischhauser explained. “But by the third and fourth billion, supply constraints will be much more pronounced, leading to exponential price acceleration.”
This phenomenon, described as a “demand shock,” occurs when capital inflows far exceed the available supply, causing a sharp, sustained price surge.
Multiple Sources Could Drive Net Demand
Tischhauser emphasized that multiple factors could contribute to this surge in net demand, including:
- State and local governments allocating reserves to bitcoin
- Institutional investors increasing exposure
- Corporate treasuries diversifying into digital assets
She also highlighted the correlation between stablecoin market cap growth and crypto market liquidity, suggesting that rising stablecoin inflows signal increasing capital allocations toward bitcoin.
2024 Multipliers Set the Stage for an Even Bigger Surge
The 20x multiplier effect is based on observed market behavior during inflows in 2024, but Tischhauser believes the impact could be even greater if central banks begin accumulating bitcoin reserves.
“We saw this dynamic play out during inflows in 2024,” she said. “But if central banks step in, the surge could be much larger.”
With global interest in bitcoin as a strategic reserve asset growing, Tischhauser’s insights suggest that institutional and governmental adoption could trigger an unprecedented wave of price appreciation—one that could redefine bitcoin’s role in the financial system.
Leave a comment