According to a recent analysis by Vetle Lunde, Senior Analyst at K33 Research, the transformative power of US Bitcoin (BTC) spot ETFs may be significantly underestimated by the broader market. Lunde presents five core reasons to support this assertion.

Why The Market Is Wrong On Bitcoin

Lunde believes that the current climate is favorable for the approval of US spot ETFs, with Bloomberg experts increasing the odds of approval to 75% this year and 95% by the end of 2024. Additionally, Lunde highlights the retracement of BTC price to pre-BlackRock announcement levels and the potential competition from multiple US spot ETF launches that could lead to robust inflows.

He draws attention to the fact that similar ETF launches in Canada resulted in inflows of 58,000 BTC within four months, and suggests that the potential inflow in the US market could be considerably higher.

Another reason presented by Lunde is the historical correlation between BTC investment vehicle inflows and appreciating BTC prices. Additionally, he notes that the market recently got rid of excess leverage on August 17.

By The Numbers

Based on these factors, K33 Research predicts that US BTC spot ETFs could see at least 30,000 BTC worth of inflows in their first 10 days. Over a span of four months, the combined inflows into BTC investment vehicles could range between 70,000 to 100,000 BTC. Lunde suggests that this could potentially drive a 66% BTC rally, targeting a price of $42,000. However, he emphasizes that this projection does not account for other market-moving events.

At the time of writing, BTC was trading at $25,865.

FAQs

What are US Bitcoin spot ETFs?

US Bitcoin spot ETFs refer to exchange-traded funds that provide exposure to Bitcoin by holding the actual cryptocurrency as an underlying asset. These ETFs allow investors to gain exposure to Bitcoin without having to directly purchase or store the cryptocurrency themselves.

What is the potential impact of US Bitcoin spot ETFs?

The potential impact of US Bitcoin spot ETFs is believed to be significant as it could lead to increased institutional and retail adoption of Bitcoin. It could also attract more investment into the cryptocurrency, potentially driving up its price.

What is the price target suggested by the analysis?

The analysis suggests a potential BTC price rally of 66% with a target price of $42,000. However, it is important to note that this projection is based on certain assumptions and does not take into account other market factors that could influence the price of Bitcoin.

How does historical data support the analysis?

The analysis highlights a correlation between strong BTC investment vehicle inflows and appreciating BTC prices in the past four years. This suggests that if there are significant inflows into BTC investment vehicles, it could contribute to a positive impact on the market and potentially drive up the price of Bitcoin.