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As the market rally continues, investor sentiment appears to be increasingly positive. This is seen in the way traders move and store their assets. Data analyzed by the market intelligence platform Santiment revealed that the supply of bitcoin (BTC) and ether (ETH) on crypto exchanges has hit multi-year lows. While this development does not guarantee anything, it is a major bullish sign and has vast implications for the market. According to Santiment, BTC’s supply on exchanges has fallen to 7.1% for the first time since November 2018. Over the last five years, there has been 1.7 million less BTC on crypto trading platforms. Similarly, ETH now has less than 4.9% of its supply on crypto exchanges for the first time in more than 10 years. It also has 15.3 million fewer coins on trading platforms over the last five years. A shrinking supply of a certain cryptocurrency on exchanges often means a decline in assets available for immediate sale. This also means that investors are more confident and are moving their assets to cold storage for long-term holding, with the expectation of future price appreciation. With shrinking supply comes reduced selling pressure, especially over the short term. This leads to high price swings , especially if demand rises. One way to determine if the BTC and ETH markets are experiencing higher demand is to examine flows into their investment products. The United States spot Bitcoin exchange-traded fund (ETF) market has recorded eight days of positive flows out of the last ten trading days. The daily inflows have been running into hundreds of millions of dollars. Spot Ethereum ETFs have also seen notable inflows over the same time frame, although not as much as BTC. Additionally, data from CoinShares’ Digital Asset Fund Flows Weekly Report indicates that digital asset investment products attracted positive flows for the fifth consecutive week, with Ethereum and Bitcoin funds recording substantial inflows. While demand for BTC and ETH continues, their prices are up slightly in the past 24 hours. Data from CoinMarketCap shows that BTC trading is at $105,290, and ETH is hovering around $2,527 at the time of writing.

Bitcoin has been swinging between steep increases and short-lived retreats over the past few weeks. After it fell to $76,273, it went up to $104,974. Although it came close to that high bar, it couldn’t sustain itself and traded at $104,920 following a 0.50% decline during the past 24 hours. However, long-term forecasts by Ark Invest indicate massive moves might be looming ahead. Cathie Wood, CEO of Ark Invest, made her prediction in an interview with CNBC and presented a long-term view. The firm’s base scenario predicts Bitcoin at $700,000 to $750,000 by the end of the decade. Under an aggressive scenario, it goes all the way to $1.5 million. These forecasts were made by David Puell, who is the market analyst at Ark Invest. Wood pointed out how investor sentiment is slowly shifting. She opines that more and more people see Bitcoin as a safe repository of funds. That potentially makes it a challenger to gold in that role. Institutional involvement is in its nascent stages now, she said but is poised to be a potent growth driver. Ark Invest has backed its forecast with active investing. With its ARK 21Shares Bitcoin ETF, it has invested an additional $58 million in Bitcoin. Wood emphasized that institutional investing is still just starting out as he asserted that “Institutions are just testing the waters.” Should they increase their participation, it might drive Bitcoin significantly higher in the years to come. From a security perspective, Wood also referred to Bitcoin’s capacity to protect its holders against unjust seizure of wealth. This, she said, could be achieved either through inflation or confiscation at a state level. Because Bitcoin’s supply is constant and not regulated by central banks, it possesses stability that traditional currencies do not have. In the case of deflationary times, Wood further added that Bitcoin also has an advantage: transparency. In her view, this characteristic could prevent the kind of trust-based collapse that occurred in 2008 during the financial crisis. We won’t have an 08-09 with Bitcoin, everything is decentralized, no obfuscation, In spite of recent volatility in markets, Bitcoin would need to increase significantly in its long-term estimates according to Ark’s targets. Presently, the asset is 57% up year-to-date. After that, the base-case target figure of $710,000 would need a 575% jump. In a bear case scenario, Bitcoin would have to increase by 1,330% to $1.5 million. Even more bearish is a more conservative estimate that anticipates growth of about 185% to $300,000. Wood’s optimism about these prices is based on both Bitcoin’s finite nature and its growth as an alternative store of wealth.

If $ETH evolves into a digital store of value, its market cap could grow to $2T-$20T, similar to silver or gold. If $ETH becomes the fuel of the global digital economy, we’re talking $4T, like current oil reserves. If $ETH becomes true money, it could match the $20T M1 USD

Justin Sun visited the Worldcoin Hollywood offline flagship store