In a recent blog post, crypto investment firm Galaxy Digital has estimated that the price of Bitcoin (BTC) will increase by 74.1% in the first year after the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States. The firm’s research associate, Charles Yu, arrived at this figure by assessing the potential price impact of fund inflows to Bitcoin ETF products using gold ETFs as a baseline. According to Yu’s estimates, Bitcoin’s price would initially rise by 6.2% in the first month after the ETF launch, gradually trending downward to a 3.7% monthly increase by month 12.
Using Bitcoin price data from September 30th, a 74.1% increase in Bitcoin’s current price would see it reach $59,200. Markus Thielen, head of research at digital asset financial services firm Matrixport, also predicted a similar increase in a recent post, estimating that Bitcoin could rise to between $42,000 and $56,000 if BlackRock’s spot Bitcoin ETF application is approved.
According to Yu’s predictions, the addressable market size for U.S. Bitcoin ETFs would reach $26.5 trillion in the second year and $39.6 trillion in the third year after launch.
What is a spot Bitcoin ETF?
A spot Bitcoin ETF is an exchange-traded fund that allows investors to gain exposure to the price of Bitcoin without directly owning the cryptocurrency. It is designed to track the price of Bitcoin and provide investors with a convenient way to invest in the cryptocurrency market.
What are the potential benefits of a spot Bitcoin ETF?
The launch of spot Bitcoin ETFs could bring several benefits to the cryptocurrency market. It would provide easier and regulated access for institutional and retail investors to invest in Bitcoin. Additionally, it could increase the liquidity of Bitcoin in the market and potentially lead to greater price stability.
What are the risks associated with a spot Bitcoin ETF?
While the launch of spot Bitcoin ETFs has the potential for positive market impact, it also carries certain risks. One of the main risks is the possibility of market manipulation, as large inflows and outflows of funds into the ETF could distort the price of Bitcoin. Additionally, regulatory concerns and approval delays can also impact the launch and performance of Bitcoin ETFs.
Crypto investment firm Galaxy Digital predicts that the price of Bitcoin will increase by 74.1% in the first year after the launch of spot Bitcoin ETFs in the United States. The firm’s research associate arrived at this estimate by evaluating the potential price impact of fund inflows using gold ETFs as a reference point. The predictions suggest that the addressable market size for U.S. Bitcoin ETFs could reach trillions of dollars in the coming years. However, it is important to note that these estimates are based on assumptions and there are various factors that can influence the actual performance of Bitcoin and the ETF market.