The founder of Morgan Creek Capital, recently had his say on the possibility of a parabolic rise in the price of Bitcoin in succession to the approval of ETFs.
Summary
Morgan Creek Capital founder and his hypothesis on the price of Bitcoin once ETFs are approved
In the ever-changing cryptocurrency landscape, Bitcoin has consistently proven to be the pioneer and leader. Mark Yusko, founder of Morgan Creek Capital, recently shared his insights on the future of Bitcoin in an interview with Paul Barron Network.
According to Yusko, Bitcoin is poised for a parabolic rise, led by an institutional capital inflow of hundreds of billions of dollars.
We delve into Yusko’s analysis, the significance of Bitcoin’s halving cycle and the potential impact of ETF approval on the cryptocurrency market.
The halving cycle and the price trajectory of Bitcoin
Yusko’s analysis begins with an examination of Bitcoin’s halving cycle, a crucial event that occurs every four years.
During this event, the rewards given to Bitcoin miners are halved, reducing the rate at which new Bitcoin is generated.Â
The next halving is scheduled for April 2024. Yusko highlights an intriguing pattern observed in Bitcoin’s price history: after each halving, Bitcoin tends to add a zero to its price.
For example, after the first halving, the price went from $100 to $1,000.
Subsequently, after the second halving, it rose from $1,000 to $10,000.
According to this pattern, the next logical step would be to reach a fair value of $100,000. Currently trading at $26,000, Bitcoin appears to be on a rapid trajectory toward this fair value.
The parabolic Blow-Off Top phenomenon
What makes Yusko’s analysis particularly interesting, however, is his mention of the “parabolic top,” which tends to occur after each half-life cycle.
In the previous cycle, Bitcoin’s fair value was estimated at around $30,000, but it eventually rose to $69,000.
This dramatic increase was largely attributed to excessive leverage, speculative trading, and rampant gambling in the cryptocurrency market.
Yusko, however, offers a more conservative estimate for the current cycle.
He suggests that instead of seeing a 2 or 2.5-fold increase, Bitcoin could experience a 1.5-fold surge this time around. This is indicative of a more cautious and calculated approach by investors and market participants.
The role of Bitcoin ETFs as catalysts for the price increase
One of the key catalysts that Yusko believes will drive Bitcoin’s rise is the potential approval of exchange-traded funds (ETFs) on Bitcoin.
He predicts that these ETFs could gain regulatory approval by late 2023 or early 2024. Once this is achieved, it could pave the way for a massive influx of capital into the cryptocurrency space.
Yusko’s estimate is bold: He predicts that about $300 billion in capital could flow into Bitcoin after the approval of a spot ETF.
This influx of capital could be a game changer, as a significant portion of Bitcoin’s supply is held by long-term investors or remains dormant.
The combination of increased demand and limited supply could push the price of Bitcoin to unprecedented levels.
Conclusions
In conclusion, Mark Yusko’s analysis presents an interesting perspective on the future of Bitcoin. His observation of Bitcoin’s historical price patterns following halving events, along with the potential impact of ETF approval, offers valuable insights for investors and enthusiasts.
Although the cryptocurrency market remains highly volatile and unpredictable, Yusko’s assessment suggests that Bitcoin’s journey to new heights may be well underway, thanks to institutional investment and a cautious market approach.
As the cryptocurrency space continues to evolve, only time will tell if his predictions come true.
