According to Galaxy Digital, the launch of a bitcoin ETF is expected to cause a 74% increase in the price of bitcoin in its first year, surpassing $59,000. This prediction does not include potential second-order effects. Charles Yu, a research associate at Galaxy Digital, estimated that the market size for bitcoin-based ETFs could reach $14.4 trillion in the first year. The forecast was based on the expected price impact of investing in bitcoin ETFs using gold ETFs as a benchmark.
Markus Thielen, head of research at Matrixport, made a similar prediction, stating that the approval of BlackRock’s application for spot ETFs on bitcoin could boost the price from $42,000 to $56,000. Yu also predicted that the potential market size for Bitcoin ETFs in the US would reach $26.5 trillion in the second year and $39.6 trillion in the third year.
Yu acknowledged that delayed approval or rejection of spot ETFs could affect his price forecast but emphasized that his estimates were conservative and did not fully consider second-order effects resulting from the approval of bitcoin ETFs. He expects other global markets to follow the US example and approve bitcoin ETFs in the near future.
The launch of iShares Bitcoin Trust (IBTC) on the Depository Trust and Clearing Corporation (DTCC) website marked a significant step towards a bitcoin ETF. Eric Balchunas, senior analyst at Bloomberg Intelligence, noted that IBTC is the first spot bitcoin ETF listed on DTCC. Progress has also been made by players like Ark Invest and 21Shares, who have adapted their proposals to meet regulatory requirements.
The registration of Grayscale’s Bitcoin Trust (GBTC) under the Securities Act of 1933 and criticism of the SEC’s earlier rejection by the DC Circuit Court of Appeals further reinforced efforts towards a bitcoin ETF. As these financial institutions overcome logistical challenges and regulatory requirements, the mainstream adoption of bitcoin draws closer, with positive implications for its price and the cryptocurrency market’s future. However, the current situation remains uncertain.
Hot Take: The Launch of Bitcoin ETF Expected to Boost Price by 74%
Galaxy Digital predicts that the introduction of a bitcoin ETF will lead to a significant 74% increase in the price of bitcoin within its first year, pushing it above $59,000. This projection does not even take into account the potential second-order effects that could further drive up the price. Other experts, such as Markus Thielen from Matrixport, have made similar forecasts, suggesting that approval of BlackRock’s spot ETFs could push bitcoin’s price from $42,000 to $56,000. These predictions highlight the growing optimism surrounding bitcoin ETFs and their potential impact on the market. As more countries consider approving these investment vehicles, we could see a pivotal year for bitcoin in 2024, with increased investment inflows and other factors contributing to its growth.
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