Mark Yusko, the Founder, CEO, and CIO of Morgan Creek Capital Management, LLC, a prominent investment management firm, recently predicted an imminent sharp increase in Bitcoin’s value. In a recent discussion on the Paul Barron Network, Yusko highlighted that Bitcoin has historically seen its price multiply by ten following each halving event.
Bitcoin’s halving is a pre-scheduled event that takes place approximately every four years, or after 210,000 blocks have been mined. During this event, the reward that miners receive for adding new transactions to the blockchain is cut in half. Originally set at 50 bitcoins per block, the reward has undergone several halvings and is currently at 6.25 bitcoins. The next block reward will be 3.125 BTC. This reduction in mining rewards effectively decreases the rate at which new bitcoins are created, introducing scarcity and potentially driving up demand. The halving mechanism is built into Bitcoin’s protocol to control inflation and ensure that only 21 million bitcoins will ever exist.
The next such event is specifically slated for April 2024. Yusko suggests that this cyclical event could lead to a 1.5x increase in Bitcoin’s all-time high value. In the previous cycle, Bitcoin’s price surged to $69,000, driven by excessive leverage and speculation.
Yusko elaborated on the historical trends, stating that Bitcoin’s value increased from $100 to $1,000 and then from $1,000 to $10,000 following past halving cycles. He believes that the cryptocurrency’s “fair value” currently stands at $100,000, even though it is trading at around $26,000. Yusko also mentioned that Bitcoin experiences a rapid surge after each halving, which he refers to as a “parabolic blow-off top.”
Yusko expects that spot Bitcoin exchange-traded funds (ETFs), specifically spot-based ETFs, will receive regulatory approval either by the end of 2023 or the beginning of 2024. This development will likely trigger a massive capital inflow into the cryptocurrency market. Specifically, he estimates that around $300 billion could be invested in Bitcoin once a spot-based ETF is approved.
The Morgan Creek Capital founder emphasized that the majority of Bitcoin’s supply is either dormant or held by long-term investors. Given this, he argues that an influx of $300 billion would significantly impact Bitcoin’s price, considering the limited free float available. Yusko pointed out that with “$300 million on $100 million of free float, the price goes up a lot.”
Last month, Yusko expressed his optimistic outlook on Bitcoin’s future in an interview with Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News. Yusko identified two main catalysts that could potentially drive Bitcoin’s price up by as much as 410%. The first catalyst is the growing adoption of Bitcoin by institutional investors, which Yusko believes will naturally increase demand for the cryptocurrency. He compared this to the early days of the internet, where initial skepticism eventually gave way to widespread acceptance.
According to Yusko, the second catalyst is Bitcoin’s potential to become a global reserve asset. He argues that as countries face economic challenges, there will be a shift towards decentralized digital assets like Bitcoin, which offer advantages such as limited supply and decentralization. Yusko’s views align with his previous bullish stance, where he suggested that Bitcoin could achieve a market cap similar to gold’s, potentially reaching a price of $300,000. He emphasized Bitcoin’s advantages over gold in terms of portability and transferability and concluded that reaching a market cap equivalent to gold’s is not only plausible but logical.
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