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JMP Securities, Bitcoin‘s price has dropped below $70,000, but they predict it could potentially reach $280,000. This prediction was published in the firm’s latest research report. Over the next three years, it is believed that there will be a significant inflow into spot Bitcoin exchange-traded funds (ETFs), indicating a price level of $220 billion. This is based on the increasing investor interest in cryptocurrencies and positions Coinbase to take advantage of these developments.
The Importance of ETFs in Bitcoin’s Market
The JMP report commented on the remarkable journey of spot Bitcoin ETFs, which saw inflows reaching $10 billion two months after their approval. Analysts suggest that such a surprising figure could be the first step of a likely trend.
Comments suggest that ETF approvals could serve as a significant driving force for future inflows, which could continue to multiply. Indeed, CryptoQuant CEO Ki Young Ju emphasized that if institutional inflows into Bitcoin continue, a “sell-side liquidity crisis” could be imminent.
Ju made the following statement:
Until the spot Bitcoin ETF inflow stops, bears cannot win this game… If this pace continues, we will see a sell-side liquidity crisis within 6 months… When a sell-side liquidity crisis occurs, due to limited sell-side liquidity and a thin order book, the next cyclical peak could exceed our expectations.
How Much Will Bitcoin Be Worth?
At the heart of the price prediction is the potential impact of planned capital inflows on the price of Bitcoin.
JMP analysts, including Devin Ryan, believe that the potential inflow of $220 billion could double Bitcoin’s market value and push its price to $280,000.
This prediction indicates that the new capital could represent an approximate 25X increase. Consequently, it is thought that this could have a significant impact on Bitcoin’s overall market value.
On the other hand, one of JPMorgan’s analysts, Nikolaos Panigirtzoglou, suggested that the recent inflows in the market could actually be the result of capital shifting from traditional crypto institutions like exchanges to spot Bitcoin ETFs. However, he also noted that the situation could change in the future.
Crypto exchanges have seen a cumulative Bitcoin outflow of about $7 billion since the launch of the spot Bitcoin ETF. In other words, the net flow from retail investors to newly created ETFs is likely closer to $2 billion rather than $9 billion.
