Sygnum Predicts $1 Billion Bitcoin Reserve Purchase Could Propel Market Cap by $20 Billion
Katalin Tischhauser, Head of Investment Research at Sygnum, forecasts that each $1 billion of inflows from a potential U.S. strategic bitcoin reserve could trigger a multiplier effect, potentially increasing bitcoin’s market capitalization by as much as $20 billion. Speaking with The Block, Tischhauser outlined how this scenario would not only introduce direct capital but also cause a significant upward price shock due to limited bitcoin liquidity.
Multiplier Effect Driven by Limited Liquidity
Tischhauser explained that every additional billion dollars of strategic reserve purchases could spark a 20x multiplier effect on bitcoin’s market cap. According to her analysis, while the initial $1 billion would provide direct capital, the additional $19 billion of value would stem from a demand shock caused by bitcoin’s scarce liquid supply. “The potential demand shock will be so significant because the liquid supply of bitcoin is really very small,” Tischhauser noted, emphasizing that early inflows would rapidly be absorbed, leaving even less bitcoin available to meet growing demand.
Dynamics of Demand Shocks
The investment research head detailed how the effect unfolds: the first and second billion dollars would largely satisfy existing demand, but subsequent inflows would encounter a much tighter supply, leading to accelerated price increases. “This is what I call demand shocks—when the amount of money coming into the market exceeds the supply available for sale, the price is shocked to the upside,” she said. Her insights highlight the critical role of bitcoin’s limited availability in amplifying price movements as new capital enters the market.
Multiple Sources Fueling Net Demand
Tischhauser also pointed out that the net demand for bitcoin could come from various channels, including state and local governments seeking reserve assets, large institutional investors, and corporate treasuries. She cited the growth in the stablecoin market cap as a proxy indicator that more funds are entering the crypto market, reinforcing the possibility of a cumulative demand surge. “The 20x multiplier is based on what we saw during the surges in inflows in 2024. But we could have bigger surges this year if central banks really get involved,” she added, suggesting that further institutional participation could drive even more dramatic market movements.
Sygnum’s projection underscores the transformative impact that strategic reserve inflows could have on bitcoin’s market dynamics. With limited liquid supply and a potential influx of diverse demand sources, each $1 billion of investment might not only inject fresh capital but also catalyze a significant price surge. As market conditions evolve, industry observers will be keenly watching for these demand shocks to determine how they shape bitcoin’s future valuation.