The Future of Bitcoin Prices and the Anticipated Spot Bitcoin ETF Launch
According to David Lawant, the head of research for FalconX, a crypto trading platform for financial institutions, the launch of a spot Bitcoin ETF in the United States could have a significant impact on Bitcoin (BTC) prices. Lawant shared his predictions on Twitter, highlighting the financial variables that may play a crucial role in determining BTC’s future.
The Importance of the Spot Bitcoin ETF
The crypto community is eagerly awaiting the approval of a Spot Bitcoin ETF, which is expected to happen either at the end of 2023 or the beginning of 2024. The final deadline for the ARK/21 Shares application on January 10, 2024, is an important date in this process.
If regulatory authorities give the green light to the spot ETF, it will be a game-changer for the entire crypto asset class. Lawant emphasized that it will allow large amounts of capital, such as financial advisors, to access crypto and receive approval from prominent capital markets regulators.
Immediate Impact on Capital Inflow
The immediate impact of the spot ETF launch on capital inflow remains uncertain. Lawant stated that the first few weeks after launch will be crucial in testing the appetite for crypto among untapped pools of capital.
Lawant analyzed historical data and noted the stability of BTC’s order book above $30,000. This data provides insights into how capital inflow might affect BTC’s price trajectory. He concluded that net inflows ranging between $500 million and $1.5 billion are expected in the initial weeks post-launch.
The Magic Number for BTC Price Increase
In order for BTC to establish a new range above $40,000, total net inflows would need to exceed $1.5 billion. Conversely, if net inflows are below $500 million, BTC could return to the $30,000 level or even lower.
However, Lawant’s analysis comes with certain assumptions. He acknowledges that the recent price increase from $28,500 to $34,000 was primarily due to the anticipation of price-insensitive net inflows from the ETF launch. It was not influenced by factors such as gold correlation or global crises.
Lawant also highlighted potential variability in BTC price movement across the order book. Nevertheless, considering the reputable issuers in the SEC queue and the favorable macroeconomic climate for alternative monetary assets, Lawant remains optimistic about a potential BTC price rally following the ETF debut.
Hot Take: BTC Price at $34,542
As of now, BTC is trading at $34,542.
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