A new analysis by data analytics company CryptoQuant posits that the green light for spot Bitcoin exchange-traded funds (ETFs) might propel Bitcoin’s market cap by a whopping $900 billion. This could also lead the entire cryptocurrency market to surge by another $1 trillion.
CryptoQuant believes that spot ETFs could be the conduit for the upcoming surge in institutional involvement, as these financial bodies could offer Bitcoin access to their clientele via these ETFs.
The study further highlights that a similar surge in institutional interest was observed in 2020-2021, when several major players integrated Bitcoin into their financial portfolios. As such, approvals of spot Bitcoin ETFs could instigate a comparable momentum.
Major Institutional Firms Gear Up to Launch Spot BTC ETFs
Numerous leading U.S. financial entities have submitted applications to the US SEC, seeking approval to initiate spot Bitcoin ETFs. The green light for these could come by March 2024 at the latest, setting a pivotal benchmark in the crypto domain.
The expected capital influx from the approval of these spot ETFs might outstrip the investment received by the Grayscale Bitcoin Trust (GBTC) in its last bullish phase.
With a staggering $16.7 billion managed in assets, GBTC, overseen by the Digital Currency Group, stands as the globe’s premier cryptocurrency fund.
The recent study by CryptoQuant indicates that should the Bitcoin ETF issuers commit merely 1% of their Assets Under Management (AUM) to these funds, this could channel an estimated $155 billion into the Bitcoin realm.
This projected influx is roughly equivalent to one-third of Bitcoin’s current market valuation. In such a speculative setting, the price of Bitcoin might rocket to highs around $73,000.
In the past, during bullish cycles, Bitcoin’s market value has swollen at a pace between 3 and 5 times its actual capitalization. This trend implies that an injection of $1 in new funds to the Bitcoin market might bolster its market capitalization by $3 to $5.
Bitcoin Surged to $30k on Fake Bitcoin ETF News
The recent spike in enthusiasm about the prospective approval of spot Bitcoin ETFs was unmistakably on display when Bitcoin’s price momentarily leaped to $30,000, propelled by an incorrect report of such an endorsement from Cointelegraph.
Such fervency has led many market watchers to hypothesize that this upbeat trend might sustain, especially if actual regulatory blessings are on the horizon.
Furthermore, the study points out the GBTC discount’s convergence to its most diminished in almost two years, signaling a resurgence of confidence in the crypto sector.
Ever since the cryptocurrency market surpassed the monumental $1 trillion mark in January 2021, its trajectory has been on the rise. Currently, the aggregate market valuation hovers around $1.13 trillion, with Bitcoin commanding more than half of this total value.