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The crypto world continues to speculate on the fate of spot Bitcoin exchange-traded funds (ETFs) that are subject to approval by the US Securities and Exchange Commission (SEC). Exciting reports keep coming, and the latest report published by CryptoQuant indicates that if a spot Bitcoin ETF is approved in the US, Bitcoin could become a $900 billion asset, and the total market value of the cryptocurrency market could reach $1 trillion.
The 1-to-3 Formula in Bitcoin Shows a Range of $50,000 to $73,000
The report suggests that the first wave of institutional adoption of Bitcoin in 2020-2021 came from institutional investors who added Bitcoin to their balance sheets, and the next wave could come from financial institutions that provide their customers with Bitcoin access through spot Bitcoin ETFs. Many major financial institutions have applied to launch spot Bitcoin ETFs in the US, and these ETFs are expected to be approved by March 2024 at the latest.
According to CryptoQuant, issuers who want to list spot Bitcoin ETFs predict that Bitcoin’s market value could increase by $155 billion if they allocate 1% of the assets under their management to these ETFs. This corresponds to one-third of Bitcoin’s current market value, and in this scenario, the price could range from $50,000 to $73,000. Furthermore, in the past, Bitcoin’s market value has grown 3-5 times larger than the realized value. According to CryptoQuant, every $1 of new inflow could increase the market value by $3 to $5.
So far, many major financial institutions, including BlackRock, have applied to launch spot Bitcoin ETFs in the US, and approval for these ETFs is expected by March 2024 at the latest. The expected inflow of funds after the introduction of spot Bitcoin ETFs is expected to be much larger than the flow of funds into the Grayscale Bitcoin Trust (GBTC) during the last bull market cycle. GBTC is currently the world’s largest cryptocurrency fund with $16.7 billion in assets under management.
Rise Based on False News Could Keep Bears Away from the Market
The false news report from Cointelegraph claiming that the SEC had approved BlackRock’s spot Bitcoin ETF had quickly pushed the leading cryptocurrency above $30,000. Some observers believe that such wild price rises could deter bears from the market.
Markus Thielen, the research and strategy manager at investment management firm Matrixport, stated in a Telegram broadcast, “In the foreseeable future, no one will dare to short BTC. Even if Cointelegraph’s news turned out to be false, Bitcoin could rise further with expectations of the approval of a spot ETF.”
The expectation of a general market boom can be clearly seen from the continued decline of GBTC’s negative premium to its lowest level in about two years. The total market capitalization of the cryptocurrency market first exceeded $1 trillion in January 2021. At the time of writing, the total market value is $1.13 trillion, with Bitcoin accounting for over 50% of this figure.
