“Bitcoin will be worth $115.000 by the end of August.” This is what the CEO and head of investment strategy of Pantera Capital, a blockchain hedge fund, addressed to the company’s clients. Pantera’s estimate is based on a stock to flow model, i.e. a detailed framework of indicators that measures the price of assets based on the number of issues on an annual basis.
This model measures the rarity of bitcoin, which was codified in blockchain design when it first went up in the air 12 years ago. According to this, the number of new bitcoins created with each new block of data, every about 10 minutes, is reduced by about half every four years. In other words, theoretically, according to the stock-to-flow model, the price of bitcoin will increase as their number decreases.
The head of Pantera’s estimates are significant, as he has significant experience on Wall Street, having been head of macroeconomics for the Tiger hedge fund, having previously worked as a trader at Deutsche Bank and Goldman Sachs.
The volume of retail investments in bitcoin exceeded the investments of institutional investors, according to the American investment bank JP Morgan.
In particular, small shareholders increased their investments in crypto, while at the same time there was a decrease in institutional inflows. Perhaps because of this reduction, the cryptocurrency failed to stay above the $60.000 mark. Now, therefore, all attention is focused on the development of retail investment, especially with the new round of direct payments to US citizens as part of financial support to mitigate the effects of the pandemic crisis.
According to JP Morgan estimates, private investors acquired more than 187,000 bitcoins in the first quarter, compared to about 172,684 BTCs bought by institutional investors.