Prominent Investor Thinks Bitcoin Will Hit $1 Trillion Valuation in Next Bull Market

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Chris Burniske-former crypto lead at ARK Invest and a partner at Placeholder, a crypto venture capital partnership based in New York with $150 million in capital under management-believes the market cap of bitcoin will surpass $1 trillion during the next bull market.

At the height of the 2017 crypto rally, during which the bitcoin price hit $20,000, the market capitalization of the crypto market reached highs of $813 billion.

If bitcoin's capitalization crosses the $1 trillion mark it would mean BTC would trade for over $40,000.

Like gold and other commodities that appeal to high net worth individuals and institutions, bitcoin would have to evolve into a recognized store of value with proper infrastructure to handle massive inflows of capital.

"Bitcoin does not have a good market structure. Even for Bitcoin, different markets are posting lots of different prices. And you can pay an up to 6% spread to exchange dollars for Bitcoin, meaning Bitcoin needs to rise by as much 6% before you break even," Sprecher said.

Depending on the progress on the improvement of infrastructure, some investors including billionaire Mike Novogratz believe that what triggers bitcoin to hit a multi-trillion dollar market cap over the long run will likely be the commitment of institutional investors.

"It won't go there right away. What is going to happen is, one of these intrepid pension funds, somebody who is a market leader, is going to say, you know what? We've got custody, Goldman Sachs is involved, Bloomberg has an index I can track my performance against, and they're going to buy. And all of a sudden, the second guy buys. The same FOMO that you saw in retail."

The narrative of the entrance of institutional investors in the crypto market floated around since 2017 and many investors had remained uncertain whether institutional adoption would happen at a large scale in the crypto market.

According to a survey conducted by TRADE Crypto in partnership with BitGo, 94 percent of 150 surveyed endowments in the US have already invested in the crypto market, which would translate to 141 institutional investors.

Burniske also noted that unlike 2017, alternative cryptocurrencies like Ethereum, Litecoin, and Binance Coin have actually begun to acquire large valuations and are no longer dwarfed by bitcoin.