BTC Price Forecast: Unveiling the Potential Price Soar of Bitcoin with Spot ETFs



The post BTC Price Forecast: Unveiling the Potential Price Soar of Bitcoin with Spot ETFs appeared first on Coinpedia Fintech News

The market has been abuzz with speculations regarding the impact of spot ETFs on the price of Bitcoin. Major financial institutions such as BlackRock and Fidelity have expressed interest in Bitcoin spot ETFs, leading to increased investor confidence and a surge in BTC prices.

According to Meltem Demirors, the chief strategy officer at coinShares, the rise in BTC price cannot be solely attributed to spot ETFs. Demirors highlighted that numerous prominent institutions in the United States are actively seeking ways to provide Bitcoin access to their clients, with over $27 trillion in client assets awaiting deployment.

BlackRock’s recent application for a Bitcoin ETF has played a crucial role in rebuilding investors’ trust in the market, especially after the Securities and Exchange Commission’s (SEC) lawsuits against major cryptocurrency platforms such as Coinbase and Binance. Furthermore, rumors of other industry giants like Fidelity Investments, Invesco, and WisdomTree filing for spot Bitcoin ETFs have fueled market optimism.

The potential influx of a fraction of the $27 trillion in managed client assets into spot Bitcoin ETFs could have an unimaginable impact on BTC’s price. Even a mere 1% allocation would amount to over $270 billion, dwarfing Bitcoin’s current market capitalization of $590 billion.

Historical Analysis

Taking a historical perspective, the performance of gold prices following the launch of the first gold ETF in November 2004 offers valuable insights. The initial gold ETF significantly boosted the price of gold, propelling it from $400 to $600 in 2006 and $800 in 2008. Eventually, in 2011, gold reached an all-time high of nearly $2,000, representing a staggering 359% increase.

Bitcoin has often been referred to as the digital gold of the century. Currently, Bitcoin’s market capitalization stands at $590 billion, while the market capitalization of gold is $12 trillion. If BTC were to capture just 10% of gold’s market share, it would effectively double Bitcoin’s current market capitalization.

Another benchmark to consider is the total market capitalization of the global stock market, which currently amounts to $100 trillion. Presently, Apple shares account for a mere 3% of this total. Moreover, the supply side plays a crucial role in price appreciation. Expert Alessandra Ottaviani asserts that BlackRock and Fidelity would only need to allocate 0.3% of their managed capital into Bitcoin to acquire all existing BTC on other exchanges.

What Next For Bitcoin Price?

Data indicates that an increasing number of coins are being withdrawn from exchanges. Glassnode reports that only 2.28 million BTC remains on exchanges. All signs point to Bitcoin experiencing a substantial bull run driven by influential institutions.

However, it is important to note that the SEC could still reject applications for Bitcoin spot ETFs, as it has done in the past. Alternatively, BlackRock could opt to purchase Bitcoin over-the-counter (OTC). For instance, the asset manager could acquire the over 200,000 BTC seized by the US government through OTC channels.

Such a scenario might trigger a “buy the rumor, sell the news” event. Nevertheless, procuring BTC OTC from the US government could prove profitable in the long run, as it would prevent the government from flooding the open market with its BTC holdings, as it has done previously.