Bitcoin ETF Approval Could Have Far-Reaching Effects
A recent report by Matrixport, a digital assets financial services platform, highlights the potential impact of the approval of a Bitcoin spot Exchange-Traded Fund (ETF) by the US Securities and Exchange Commission (SEC). According to the analysis, not only could the Bitcoin market experience a significant boost, but Tether (USDT) and the broader crypto market could also see positive outcomes.
Potential Impact On Bitcoin
Matrixport’s 2023 outlook report projects a substantial crypto rally driven by factors such as lower US inflation and favorable macroeconomic conditions. This projection anticipates strong rebounds for Bitcoin and Ethereum (ETH), along with decreased volatility. Grayscale Investments’ Bitcoin Trust (GBTC) has been a standout performer in the market, with its share prices surging by an impressive 167% year-to-date, outpacing Bitcoin’s 71% growth.
The report suggests that even a modest 1% allocation recommendation for Bitcoin by the US registered investor advisor (RIA) community would result in approximately $50 billion in inflows.
$56,000 BTC Price Projection
Assuming that between 10-20% of precious metal ETF investors explore a Bitcoin ETF as a diversification tactic, the potential influx into the Bitcoin ETF could reach $12-24 billion. A $24 billion increase in Tether’s market cap could conservatively push Bitcoin’s price to $42,000. With an even larger influx of $50 billion resulting from a 1% allocation by RIAs, Bitcoin could rally to $56,000.
Hot Take: Ripple Effects of Bitcoin ETF Approval
Matrixport’s analysis sheds light on the potential ripple effects of Bitcoin ETF approval beyond just Bitcoin’s immediate market. Tether and the wider cryptocurrency landscape could also be impacted. As the industry awaits regulatory decisions, it remains poised for potential growth and transformation.
Source: Matrixport Report
As of the time of writing, the leading cryptocurrency in the market, Bitcoin (BTC), is trading at $28,700, reflecting a 1.8% increase over the past 24 hours.
It is worth noting that BTC has successfully maintained the gains it has made since mid-September. During this period, the cryptocurrency broke its short-term downtrend structure after reaching its peak for the year at $31,800 on July 13.
Featured image from Shutterstock, chart from TradingView.com
Hot Take: Bitcoin Holds Strong Amidst Market Volatility
Bitcoin continues to show resilience in the face of market volatility. Despite fluctuations, it has maintained its gains since mid-September and broke its short-term downtrend structure. With the potential approval of a Bitcoin ETF, as highlighted in Matrixport’s report, Bitcoin’s future looks promising with the possibility of significant price rallies.
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