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Alex Krüger 🇦🇷 @Crypto_Macro
, 7 tweets, 3 min read Read on Twitter
According to JPM, only 2 billion dollars entered Bitcoin in 2017 => $2 billion propelled bitcoin's market cap from $15 billion in Jan/1/2017 to $250 billion by year end.
That would represent a fiat amplifier of 117.5 - thanks @cburniske for the correction.

@cburniske's estimate of the fiat amplifier for 2017 was "anywhere from 2–25x depending on the assumptions used". See for more details:…

Why is there a fiat multiplier? It is about relative liquidity.

Invest a relatively large sum in a small asset (in $ terms), where additionally a significant fraction is not liquid (i.e. does not trade, sits off exchanges) => prices skyrocket. Fixed supply compounds the impact.
Another way to look at this.

Want to buy 1,000 BTC ($3.8 million) at market on Coinbase? You need to cross the bid-ask spread. Doing so would result in approximately a 10% premium.

The larger the size invested, the higher price goes.

Estimates for the 2017 multiplier vary:

- JPM: 117x
- Citi: 50x ("for some cryptoassets")
- Burniske: 2x-25x
- Vinny: 5x-10x

The existence of a fiat multiplier doesn't indicate there is anything wrong. It just is. Applies both ways (inflows-bullish, outflows-bearish). It is tied to liquidity. A good estimate could be calculated having access to Coinbase's data. All assets have a fiat multiplier.
Given extensive HODLING and most buying/selling taking place by year end 2017, the JPM multiplier severely *overestimates* the real multiplier.

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