Fidelity outlines conditions for Bitcoin’s market capitalization to reach $500 billion

Bitcoin’s current market capitalization is a drop in the ocean relative to the markets it could influence. However, institutional investors could push this figure to $500 billion. This is according to a new study by Fidelity Investments.

Bitcoin Alternative Investment by ForkLog on Scribd

Ria Butoriya, director of research, noted that the influx of institutional investors could strengthen the linkage between cryptocurrencies and traditional markets, although they are inherently uncorrelated.

Analysts believe that, fundamentally, digital assets are less vulnerable to economic headwinds. In a world where interest rates are near zero, Bitcoin is a ‘potentially useful’ asset.

“The risks of not including Bitcoin in a portfolio today are higher than the risk of missing this opportunity,” Fidelity notes.

According to Butoriya, shifting just 1% of the $50 trillion bond market into the crypto market could push Bitcoin’s market capitalization to $500 billion. The analyst also considers a scenario where the market cap of the leading cryptocurrency rises to $1.3 trillion.

Fidelity acknowledged that today the cryptocurrency market is predominantly driven by retail investors, for whom high volatility of digital assets is less critical.

At the time of writing, Bitcoin’s market capitalization stood at $211 billion.

Earlier in July, Fidelity Investments called Bitcoin a store of value and a hedge against problems in the financial system.

A June survey by the company found that one in three institutional investors owns Bitcoin.

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