The Potential Impact of US Bitcoin ETFs: A Closer Look
In a recent series of tweets, Vetle Lunde, Senior Analyst at K33 Research, has emphasized the transformative power of US Bitcoin (BTC) spot ETFs. Lunde argues that the broader market is underestimating their potential impact. Here are the key reasons supporting Lunde’s assertion:
Reasons Behind the Underestimation
Lunde first highlights the favorable climate for US spot ETF approval, with experts raising the odds to 75% this year and 95% by the end of 2024. Additionally, the BTC price has retraced to pre-BlackRock announcement levels, indicating a potential resurgence.
Furthermore, Lunde predicts robust inflows if multiple US spot ETFs are approved, surpassing the initial trading days of BITO and Purpose. He points to Canada’s experience, where subsequent ETF launches led to massive inflows of 58,000 BTC in just four months.
Historical data also supports Lunde’s perspective, showing a correlation between BTC investment vehicle inflows and price appreciation. Extreme inflows have historically contributed to significant market uplifts.
Projected Inflows and Potential Rally
According to K33 Research, US BTC spot ETFs could see at least 30,000 BTC worth of inflows in their first 10 days. Over four months, the combined inflows into BTC investment vehicles could range between 70,000 to 100,000 BTC. This could potentially lead to a 66% BTC rally, targeting a price of $42,000. However, Lunde acknowledges that this projection is based on a “naïve assumption” and does not consider other market-moving events.
Hot Take
The analysis by Vetle Lunde highlights the significant potential of US Bitcoin spot ETFs that the market might be overlooking. If approved, these ETFs could bring substantial inflows and contribute to a significant BTC rally. However, it’s important to remember that market conditions can change, and other factors can influence BTC’s price movement.
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