BlackRock’s Bitcoin ETF Approval Could Push BTC to $56,000, Says Matrixport
According to a report by Matrixport, the approval of BlackRock’s spot Bitcoin exchange-traded fund (ETF) could have a significant impact on the cryptocurrency market, potentially causing Bitcoin (BTC) to surge to $56,000. The report suggests that if Tether’s total market capitalization rises by $24 billion as a proxy for potential ETF inflows, the price of BTC could reach $42,000 from its current level of $28,800. Furthermore, if there is an inflow of $50 billion, representing a 1% allocation from registered investment advisors, the flagship cryptocurrency has the potential to surge to $56,000.
Predicting Inflows into Bitcoin ETF
Matrixport’s report references an earlier study that analyzed the 15,000-strong US registered investor advisor (RIA) community overseeing approximately $5 trillion. By comparing the market capitalization of precious metals ETFs at around $120 billion and assuming that 10% to 20% of investors exposed to these funds would diversify their investments with BTC as a hedge against monetary debasement and inflation, there would be an estimated inflow of $12 to $24 billion into a Bitcoin ETF.
Analyst Suggests $1 Million BTC Price and Over $21 Trillion Market Cap
After rumors falsely suggested that the US Securities and Exchange Commission (SEC) had approved BlackRock’s spot Bitcoin ETF application, the cryptocurrency market experienced a frenzy. Analyst Alessandro Ottaviani estimates that over $500 million of capital entered the market in minutes on these rumors. He suggests a ratio of 100:1, meaning that for every dollar that entered the market, BTC’s market capitalization rose by $100. Citing a former BlackRock Director, Ottaviani expects $150 billion to $200 billion to enter the Bitcoin market within three years of a spot Bitcoin ETF’s approval. Using the same ratio, a $200 billion capital inflow could lead to a Bitcoin market cap of $21 trillion, resulting in a price of $1 million per coin.
Hot Take: The Impact of BlackRock’s Bitcoin ETF Approval
If BlackRock’s spot Bitcoin ETF is approved, it could have a transformative effect on the cryptocurrency market. With the potential for significant inflows from registered investment advisors and the diversification of precious metals investors, Bitcoin’s price could surge to new heights. The mainstream adoption that would come with a regulated investment vehicle like an ETF could push BTC to reach $56,000 or even potentially reach a market capitalization of over $21 trillion and a price of $1 million per coin. These developments would solidify Bitcoin’s position as a valuable asset and further cement its role in the global financial landscape.
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