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Bitcoin ETF benefits underestimated, Andrew Kang predicts Bitcoin to hit $50K in February, reaching new highs in March.

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Bitcoin ETF benefits underestimated, Andrew Kang predicts Bitcoin to hit $50K in February, reaching new highs in March.

Mechanism co-founder Andrew Kang emphasized in his article the profound impact of a Bitcoin spot ETF on the price, believing that Bitcoin will hit a new all-time high next month. He also cited several data points to support his argument.

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Bitcoin's Astonishing Annual Net Inflow

Andrew Kang hinted that due to his frequent travels to various countries and interactions with many entrepreneurs and high-net-worth individuals, he could estimate the global liquidity and how much of it might flow into Bitcoin and cryptocurrencies.

He pointed out that the total annual income of individuals in the United States is about 13 trillion USD, and the U.S. contributes to 25% of the global GDP, resulting in a global total annual income of about 52 trillion USD.

Assuming that cryptocurrency holders globally account for about 10% and only 1% of their annual income is invested in Bitcoin, the annual net inflow into Bitcoin is 52 billion USD, equivalent to 150 million USD of net inflow per day.

Bitcoin ETF Further Boosting Demand

Andrew Kang emphasized that the above data does not yet cover the impact of Bitcoin spot ETF:

It seems that everyone has forgotten that there has always been demand for Bitcoin before these ETFs were approved. Otherwise, how do you think Bitcoin has continued to rise over the past 10 years?

Therefore, he believes that the estimation of net inflow is already conservative, as the following factors have not been taken into account:

  1. Cryptocurrency investors may invest 1% annually, but true believers may invest over 50%, so the total average could be 3-5%.

  2. The calculation does not include the investment from entities such as corporations, hedge funds, retirement funds, sovereign wealth funds, etc.

Bearish Pressure Cannot Match Net Inflow

Andrew Kang also pointed out that the claims of Mt. Gox creditors, Bitcoin seized by the U.S. government, and even the selling of mined Bitcoins have been bearish points for many, but in reality, when measuring net inflow, these selling pressures are insignificant.

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In the chart below, he calculated potential selling pressures from Mt. Gox and others, amounting to around 17 billion USD.

If we consider the annual 52 billion USD net inflow he calculated, along with the buying momentum from Bitcoin ETFs, it far exceeds these bearish selling pressures.

Note: Andrew Kang's calculations do not take into account investors' profit-taking, and the data may differ from BitcoinTreasuries.

Bitcoin Breaks Historical High in March

Andrew Kang emphasized that the positive impact of Bitcoin spot ETF, along with events like the launch of Bitcoin futures on the CME, Coinbase IPO, cannot be compared, and there have been continuous net inflows for several days.

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He predicts that Bitcoin will not drop below 40,000 USD in the future, it will rise to 50-60,000 USD in February, and hit a historical high in March.

Andrew Kang concluded by quoting his tweet from October last year, where he urged people not to miss the epic rebound, as the Bitcoin price had just broken 30,000 USD.

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