The Potential Impact of BlackRock’s Spot Bitcoin ETF on Bitcoin Price
A digital assets financial services platform called Matrixport has projected that if BlackRock’s spot bitcoin ETF is approved by the Securities and Exchange Commission (SEC), the price of bitcoin could rise to between $42,000 and $56,000. Matrixport based its analysis on 15,000 U.S. registered investment advisors and estimated that the approval of such an ETF could bring in $12 billion to $24 billion worth of inflows.
If Tether’s market cap increases by $24 billion, which acts as a proxy for potential ETF inflows, bitcoin’s price would reach $42,000 as a conservative estimate. With a larger influx of $50 billion, bitcoin could potentially rally to $56,000.
Matrixport argues that registered investment advisors oversee around $5 trillion and even a modest 1% allocation recommendation from this group could result in up to $50 billion of inflows. Drawing a parallel with precious metals ETFs, which have an estimated market cap of approximately $120 billion, Matrixport suggests that if 10-20% of precious metal ETF investors diversify into a bitcoin ETF, we could witness significant inflows into the bitcoin market.
Fake News and Additional Delays
In June, BlackRock and other institutions submitted their application for spot bitcoin ETFs. However, the SEC initiated additional proceedings last month to determine the approval or disapproval of these ETFs from major players like BlackRock, Invesco, Valkyrie, and Fidelity. This apparent delay may last at least another month.
On Monday, there was wild trading activity in the bitcoin market after a false report about the approval of BlackRock’s spot ETF circulated on social media. Bitcoin’s price experienced a 5% spike to nearly $30,000 before the news was debunked.
Former BlackRock executive Martin Bednall believes that the SEC will likely approve all spot bitcoin ETF applications simultaneously.
Hot Take: The Potential Impact of BlackRock’s Spot Bitcoin ETF on Bitcoin Price
If BlackRock’s spot bitcoin ETF is approved by the SEC, it could have a significant impact on the price of bitcoin. Matrixport’s analysis suggests that the price could rise to anywhere between $42,000 and $56,000. This projection is based on potential inflows of $12 billion to $24 billion into the ETF. With registered investment advisors overseeing trillions of dollars, even a conservative 1% allocation recommendation from this group could result in up to $50 billion of inflows. While there have been delays in the approval process and instances of fake news causing temporary market spikes, there is optimism that all spot bitcoin ETF applications will eventually be approved. If this happens, it could further legitimize and boost the adoption of cryptocurrencies.
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