Matrixport, a crypto financial services platform, forecasts a significant surge in Bitcoin (BTC) value due to positive macroeconomic settings and reduced inflation in the US.
In their recent “Matrix onTarget” report, a key highlight is the exceptional rise of Grayscale Investments’ Bitcoin Trust (GBTC) shares. These shares have skyrocketed with a 167% increase year-to-date, eclipsing Bitcoin’s own growth of 71%.
At the year’s start, GBTC’s net-asset-value (NAV) discount was at -45%, which later slightly improved to -43%.
Yet, a pivotal shift occurred with BlackRock’s declaration of their Bitcoin ETF application on June 15, 2023.
In a prior analysis, Matrixport stated that the US-based registered investment advisor (RIA) segment comprises about 15,000 advisors who manage close to $5 trillion.
“This demographic has vast potential. A mere 1% suggested allocation to Bitcoin could lead to inflows nearing $50 billion,” highlighted the firm.
When juxtaposed with precious metal ETFs, having a market valuation of approximately $120 billion, and presuming 10-20% of these investors contemplate branching into a Bitcoin ETF as a safeguard against financial dilution and rising inflation, Matrixport projected a potential inflow ranging between $12 billion to $24 billion to the Bitcoin ETF.
Should Tether’s market cap swell by $24 billion, reflecting the potential ETF inflows, Bitcoin’s valuation might ascend to $42,000, a figure Matrixport sees as a cautious approximation.
Furthermore, if there’s an augmented inflow of $50 billion due to the 1% allocation advice from RIAs, Bitcoin could potentially soar to $56,000, the company inferred.
Experts Await Launch of Spot Bitcoin ETF
Amid rising anticipation for the introduction of a spot Bitcoin ETF, Matrixport’s predictions gain prominence.
Earlier, in May, a US court sided with Ripple in its ongoing litigation with the SEC. The SEC had alleged that the act of selling XRP on exchanges equated to an investment contract. However, the ruling from the District Court for the Southern District of New York clarified that the “trading of XRP on digital asset platforms did not equate to the offering and selling of investment contracts.”
Building on this verdict, a team of analysts at JPMorgan, spearheaded by Nikolaos Panigirtzoglou, posited that the SEC might find itself cornered into green-lighting several spot BTC ETF applications.
The analysts commented that Grayscale’s triumph suggests that for the SEC to justify its refusal of Grayscale’s proposal to transform its Bitcoin trust into an ETF, it would have to retroactively revoke its earlier approvals of futures-based Bitcoin ETFs.
Yet, undertaking such an action would be both “highly unsettling and a source of embarrassment for the SEC,” making it seem improbable, according to the analysts. They further added:
“The odds seem to favor that the SEC would be pressed to greenlight the awaiting spot bitcoin ETF applications from various asset managers, Grayscale’s included.”