How Possible Bitcoin Reserves of the USA Can Affect the Market? Experienced Analyst Assessed!

According to Sygnum Investment Research President Katalin Tischhauser, a potential US strategic Bitcoin reserve could have a significant multiplier effect on the market.

1 Billion Dollar US Bitcoin Reserve Could Trigger a $20 Billion Market Value Increase

Tischhauser points to limited liquidity and demand shocks as key factors, while predicting that each $1 billion entry could lead to a $20 billion increase in Bitcoin's market value.

Tischhauser explained that the small liquid supply of Bitcoin intensifies price fluctuations when large capital inflows enter the market.

He emphasized that demand shocks occur when strategic reserve purchases create a multiplier effect of 20 times for every $1 billion, exceeding the existing supply and pushing prices higher.

The scarcity of liquid Bitcoin plays a significant role in this dynamic. As Tischhauser describes, the first few billion dollars in inflows will deplete the ready supply and make it difficult for subsequent buyers to buy Bitcoin without significantly increasing prices.

"The potential demand shock is going to be very significant because Bitcoin's liquid supply is really small," he explained Early entrants will absorb most of the available supply, leaving less Bitcoin on exchanges and intensifying price growth.

Corporate and Government Demand Can Cause a "Stampede" in the Market

Tischhauser, beyond state reserves, pointed to institutional investors, corporate treasuries, and even local governments as potential sources of constant net demand.

Additionally, he noted that the rising market values of stablecoins serve as a leading indicator of crypto inflows and indicate that large amounts of capital are preparing to enter the market.

Looking ahead, Tischhauser sees even greater potential increases in 2025, especially if central banks start allocating to Bitcoin. "The 20x multiplier is based on past inflows, but we could see even bigger increases this year if central banks really get involved," he added.