Main reason: Central Banks, in particular, US FED willingness to buy Corporate Bond EFTs since March 2020 (see article links below). This willingness by the US FED to intervene in the Corporate bond market means the saying “too big to fail” not only covers the largest Banking & Financial Institutions, but also now the largest companies. This is the ceiling factor for the predicted growth of Bitcoin to $1million, in spite of, future Bitcoin halving events.
By removing risks to the downside for Corporations and Financial Institutions, the US FED is indirectly reducing the demand for safe haven assets such as Gold and Bitcoin. This means that as the price of Bitcoin rises, it will become increasingly costly for Institutional investors to hold bitcoin, which does not generate dividends or interest, compared to income generating corporations. Like Gold which has struggled in price even during the inflationary periods of the 20th Century the same will be true of Bitcoin. Basically, a pure store of value has its limits for Institutional investors who are the backbone of any significant price rise of any kind of asset, especially for Bitcoin which seems exorbitant against all other Investments.
The so-called inflationary effect of the US Governments recent $1.9Trillion stimulus package, will not impact Bitcoin as much as anticipated. Inflation will actually increase the attractiveness of shares, both Commercial and Residential Properties as prices adjust upwards increasing the capital gains, and also the total revenues from increasing prices for goods and services. This will force Institutional investment funds to re-evaluate their Bitcoin hodling where there is no revenue stream, but just the hope of capital gains at some future date.
On the contrary, market cap of cryptocurrencies like Ethereum and Cardano, in particular, will surpass Bitcoin’s market cap and will, overwhelmingly, provide vastly more attractive revenue streams and capital gains for Institutional investors during this decade and beyond. Ultimately, investing in cryptocurrencies that create new industries, new products and services yielding profits that exceed growth rate on capital gains over time (the only offering from Bitcoin hodling) will be a “no-brainer” for both Institutional and private investors.
Another fallacy, what I call delusional assumptions that the market cap. of Bitcoin will ALWAYS define what the market cap of Altcoins will be, just because it is currently the most dominant currency influencing the price of Altcoins, therefore by extension this will continue indefinitely. I watched Bitcoin maximalists or even so call “crypto experts” in their youtube channels going through a long explanation when talking about how high the price of Ethereum or Cardano can reach based on how high Bitcoin market cap can reach. For example, they have said Cardano can’t reach $20 (that is 20X on current price or $600+Billion) in the next 5years because that means Bitcoin price MUST also be 20X giving Bitcoin an astronomical market cap of $20Trillion. Seriously? What has the share price of any existing dominant company got to do with other companies in the same industry? Did the share price of IBM ever limit the share price of Microsoft, Apple, Google, Facebook, Amazon?..I don’t know what these guys are on, not financial and economic reality, that’s for sure.
The important conclusion from this is that sometime this decade before 2030, there will be an inflexion point where the crypto market dominance of the major Altcoins, including Cardano, Ethereum, Binance Chain, and others yet to emerge to the fore will be determining the price of Bitcoin just like Microsoft, Apple, Google, Facebook, Amazon currently influence the price of IBM via the Nasdaq….a reality check for Bitcoin hodlers coming up this decade, that’s for sure!
Fed’s ETF Purchases Have Changed Markets Forever https://www.bloomberg.com/opinion/articles/2020-11-23/fed-s-etf-purchases-have-changed-markets-forever
The Fed has bought $8.7 billion worth of ETFs The Fed has bought $8.7 billion worth of ETFs. Here are the details - MarketWatch.
**Other articles by Stevod