The SEC Could Approve Spot Bitcoin ETFs and Attract Billions in Inflows
The Securities and Exchange Commission (SEC) is expected to approve spot bitcoin exchange-traded funds (ETFs) this week, potentially bringing in $50-100 billion worth of inflows this year, according to Standard Chartered Bank. The bank compared the launch of bitcoin ETFs to the introduction of gold ETFs, which revolutionized investor access to the gold market. Standard Chartered analysts estimate that BTC ETFs could see inflows of $34 billion, adjusted for market caps. The bank’s low estimate is $34 billion, while the high estimate is $130 billion. Several ETF applicants also anticipate billions of dollars flowing into the market.
Bitcoin Price Predicted to Reach $200,000 by 2025
Standard Chartered Bank sees spot bitcoin ETF approvals as a “watershed moment” for institutional investor participation in bitcoin and expects a significant price increase by the end of 2025. The bank believes that bitcoin could experience similar price gains as gold did after the introduction of gold ETFs, but over a shorter period. They predict bitcoin reaching $100,000 by the end of 2024 and potentially $200,000 by the end of 2025 if ETF-related inflows materialize as expected.
Spot Ether ETFs and SEC Approval
Standard Chartered Bank expects spot ether ETFs to be approved in the second quarter of this year. However, the SEC may view ether differently from bitcoin due to previous statements by SEC Chair Gary Gensler. While Gensler has stated that everything other than bitcoin could potentially be considered a security, ETH was not listed as a security in previous SEC lawsuits against exchanges. Therefore, it is likely that spot ETH ETFs will ultimately be allowed.
Price Dynamics of Gold and Silver ETFs
The bank suggests that the price dynamics of gold and silver ETFs offer insights into the expected prices of bitcoin and ether. Gold outperformed after the introduction of its ETF, likely due to actual inflows, while silver outperformed leading up to its ETF launch, driven by anticipated flows into the less liquid silver market. However, silver later relinquished its relative performance after the ETF introduction. The bank notes that silver ETF flows can vary significantly in both directions and represent a larger market share of annual flows compared to gold.
Hot Take: Spot Bitcoin ETFs Could Drive Massive Inflows and Bitcoin Price Growth
The potential approval of spot bitcoin ETFs by the SEC is expected to have a transformative impact on investor access to bitcoin and could attract billions of dollars in inflows. Standard Chartered Bank predicts that BTC ETFs could see inflows ranging from $34 billion to $130 billion. This development is seen as a “watershed moment” for institutional investors, and the bank anticipates a sharp rise in bitcoin prices. They project bitcoin reaching $100,000 by the end of 2024 and potentially hitting $200,000 by the end of 2025 if inflows materialize as expected.
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