What To Expect In The First Three Years
A Spot Bitcoin ETF approval by the US Securities and Exchange Commission (SEC) is anticipated to have significant effects on Bitcoin and the Spot Bitcoin ETF market. Galaxy Digital, a crypto research firm, has provided insights into what could happen in the first three years after the launch of this fund.
In a research paper released by Galaxy Digital, Charles Yu, a research associate, predicts the potential market size and inflows of a Spot Bitcoin ETF. According to Yu, RIA will adopt the fund at 50% in the first year and increase to 100% in the third year. Broker-dealers and bank channels will adopt at a slower pace, starting at 25% and increasing to 75% by the third year. If these assumptions hold true, the market size could reach $14 trillion in the first year, $26 trillion in the second year, and $39 trillion in the third year.
Based on their market size estimates, Galaxy Digital predicts inflows of $14 billion in the first year, $27 billion in the second year, and up to $39 billion in the third year for Bitcoin ETFs.
Potential Impact On Bitcoin’s Price
Gaining insight into BTC’s price impact, Galaxy Digital suggests that Bitcoin could see a 74.1% increase in price during the first year of Spot Bitcoin ETFs launching. This estimate is based on expected inflows of $14 trillion into these funds in their first year and comparisons to Gold ETFs.
Galaxy Digital projects a 6.2% price increase in the first month of these funds’ launch, with an estimated inflow of over $10 billion during that period. The price impact is expected to decrease gradually throughout the first year, resulting in a cumulative 74.1% increase.
Hot Take: Spot Bitcoin ETF Launch Could Lead to Massive Market Growth
The potential approval of a Spot Bitcoin ETF by the SEC has the crypto industry buzzing with anticipation. Galaxy Digital’s research provides a glimpse into what the market could look like in the first three years following the launch of this fund.
If their predictions hold true, the market size for a US Bitcoin ETF could reach $14 trillion in the first year, $26 trillion in the second year, and an astonishing $39 trillion in the third year. Inflows into these funds are expected to follow a similar pattern, with estimates of $14 billion in the first year, $27 billion in the second year, and up to $39 billion in the third year.
Furthermore, Galaxy Digital suggests that Bitcoin’s price could experience a significant boost, with a projected 74.1% increase in the first year of Spot Bitcoin ETFs launching. This could be a game-changer for both Bitcoin and the broader cryptocurrency market.
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