- Bitcoin could become a $900 billion asset with crypto market growth of $1 trillion if ETFs are approved.
- Spot Bitcoin ETF decisions are delayed until October by the SEC, with potential approval in March 2024.
- If 1% of AUM from ETF issuers enters the market, $155 billion could boost Bitcoin’s price to $50,000-$73,000.
According to a recent report by the data analytics company CryptoQuant, the approval of Bitcoin spot exchange-traded funds (ETFs) could lead to Bitcoin becoming a $900 billion asset, and the overall cryptocurrency market expanding by $1 trillion. In its report, CryptoQuant argued that the initial phase of institutional adoption, occurring in 2020-2021, involved institutions incorporating Bitcoin into their balance sheets. The subsequent phase, according to the report, could entail financial institutions offering their clients access to Bitcoin via spot ETFs.
Several significant financial institutions have sought approval for spot Bitcoin ETFs in the United States, with the latest possible approval date being March 2024. As per the last updates from September, according to agency filings on Thursday, the U.S. Securities and Exchange Commission (SEC) has postponed its decision on the spot Bitcoin exchange-traded fund (ETF) applications submitted by various applicants, including BlackRock, WisdomTree, Invesco Galaxy, Wise Origin, VanEck, Bitwise, and Valkyrie Digital Assets. The decision is now expected in October.
The potential influx of funds from spot ETFs could surpass the amount invested in the Grayscale Bitcoin Trust (GBTC) during the previous bullish market cycle. GBTC, the world’s largest digital assets fund, presently manages $16.7 billion in assets. It’s worth noting that Digital Currency Group is the parent company of both Grayscale and CoinDesk.
According to CryptoQuant, if the entities seeking approval to list Bitcoin ETFs allocate 1% of their Assets Under Management (AUM) to these ETFs, around $155 billion could flow into the Bitcoin market. This accounts for nearly a third of Bitcoin’s current market capitalization. In this hypothetical situation, it could potentially drive Bitcoin’s price to a range between $50,000 and $73,000.
CryptoQuant suggests that if the entities seeking approval to list Bitcoin ETFs allocate just 1% of their Assets Under Management (AUM) to these ETFs, an estimated $155 billion could potentially flow into the Bitcoin market. This would constitute nearly a third of Bitcoin’s current market capitalization. In the event of this scenario, it could theoretically drive Bitcoin’s price to a range between $50,000 and $73,000.
In the past, throughout past bullish market cycles, Bitcoin’s market capitalization has typically grown 3 to 5 times more than its realized capitalization. This implies that for each additional dollar entering the Bitcoin market, the market capitalization could potentially increase by $3 to $5, as noted by CryptoQuant.
Recently, Bitcoin briefly surged to $30,000 in response to a misleading report from Cointelegraph that wrongly claimed the approval of a spot Bitcoin ETF. Some analysts believe that this intense and optimistic price movement could deter bearish trends for a considerable period.
