According to CryptoQuant, financial giants like BlackRock, VanEck, and Fidelity Investments, which have expressed interest in launching a spot Bitcoin ETF, could allocate a portion of their substantial assets under management (AUM) to Bitcoin. This move could result in billions of dollars flowing into the Bitcoin market, causing the price of Bitcoin to more than double.
In their estimation, if these ETFs are approved, it is possible that approximately $155 billion could enter the Bitcoin market. These companies collectively manage around $15.6 trillion in AUM. If they were to invest just 1% of their AUM in Bitcoin ETFs, it could lead to an influx of $155 billion into the Bitcoin market. Based on this increased demand, the price of Bitcoin could potentially rise to a range between $50,000 and $73,000.
As of the current writing, Bitcoin is trading at $28,250. If it were to reach $73,000, it would represent a remarkable 155% increase in its value. In terms of the anticipated approval timeline for spot Bitcoin ETFs by the SEC, CryptoQuant notes that recent positive legal outcomes for Grayscale (GBTC Fund) and XRP in their respective battles with the SEC have increased the likelihood of approval by the ultimate deadline in March 2024, even though approval is not expected in the near future.
Investors generally hold an optimistic outlook on Bitcoin due to its potential as a store of value, its limited supply of 21 million coins, increasing mainstream acceptance, and its potential to provide a hedge against traditional financial institutions.
The value of Bitcoin is also expected to be influenced by factors such as corporate adoption, growing interest from institutional investors, and the possibility of broader adoption. Notable figures in the financial industry, like hedge fund manager Scaramucci, have cited reasons for their positive stance on Bitcoin.
These reasons include the potential for a Bitcoin ETF, an upcoming Bitcoin halving event, federal monetary policies, and increasing demand for durable assets amidst a growing US deficit.
Bitcoin’s halving event, which reduces miner rewards by 50% every four years, is approaching in about six months. Analysts suggest that this event typically has a positive impact on Bitcoin’s price performance, often serving as a catalyst for new all-time highs.
Scaramucci highlights the significance of ETFs, noting that their approval by the SEC would help mitigate regulatory risks and improve access for traditional investors.
Furthermore, with the growing interest from major financial institutions like BlackRock and Invesco, Scaramucci believes that Bitcoin’s limited supply will become an even more attractive proposition for customers in the near future.
The fate of spot Bitcoin ETFs as determined by the SEC holds the key to a potentially substantial increase in Bitcoin’s value. The potential influx of institutional capital, growing interest, and the looming halving event all contribute to a promising outlook for the cryptocurrency’s future.
As the crypto community awaits regulatory clarity, the potential for Bitcoin’s growth continues to be a subject of great anticipation and discussion.