Fidelity: Bitcoin Could Exceed $1Trillion in Market Cap

According to Fidelity, the market cap of Bitcoin could exceed $t trillion after an increase of ten-fold in the price value. This is because it has the potential to become a better alternative investment asset.

In its latest report, researchers at Fidelity put Bitcoin in the first place, and its potential to become a better alternative investment in an attempt to prevent risks in the traditional markets.

Market Cap: $1.4 Trillion

Currently, the investment of investors in the top digital asset is very negligible as compared to traditional assets. Fidelity presents a scenario saying if Bitcoin covers only 5% 0f overall investments in the markets, an injection of $670 billion in the market cap is imminent. Similarly, the market cap could expand to $1.3 trillion in the case of 10% market capturing.

Bitcoin can take a significant portion of the market, claim Fidelity researchers. If the world’s top digital asset gains 1% of the bond market, Bitcoin can see an influx of $500 billion investments.

Bitcoin should be an important part of a portfolio because it can outperform other assets in the future. So, it is a big opportunity for institutional investors to take benefit from a potential hedging safe-haven asset.

Fidelity proposes Bitcoin could trade at $100,000 if its price surges by 10 folds by capturing $2 trillion market capitalization.

No Correlation between Bitcoin and Traditional Assets

The report also unveils a relationship in the form of correlation between traditional assets, such as gold and S&P 500, and Bitcoin. A correlation existed for some time but it is not available in a long-time scenario.  Director of Research at Fidelity, Ria Bhutoria, stated the correlation between equities and bitcoin does not exist in the long-term as he observed five years relationship between both. For instance, from January 2015 to September 2020, the correlation figure stands at 0.11 which is a negligible value.

But the majority of traders and investors respond to Bitcoin in a similar way to traditional assets. With a bearish S&P 500, investors also draw capital from Bitcoin.

Bitcoin can be used as a hedging investment in the time great of uncertain times in the traditional markets.

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