The cryptocurrency market is in its early stages, with debates about future Bitcoin spot ETFs resurfacing daily. These new financial products are expected to arrive on the American and global financial markets soon, but speculation and conjecture surround the consequences of these famous ETFs. Galaxy Digital has detailed the interests of such ETFs for cryptocurrency in general and the potential reactions of the price of Bitcoin following these long-awaited approvals.
Galaxy Digital's study highlights the importance of accessibility and acknowledgment from the rest of finance for the potential impact on the crypto market. ETFs will be offered from various financial product providers, such as wealth managers or professional financial advisors (RIA), bringing more consumers into the market. This democratization will also enable the entry of the baby boomer generation into crypto, who will be reassured by the supply of historically reliable interlocutors.
The impact of these ETFs on the crypto market in general and Bitcoin in particular could result in a massive flood of fresh money into the crypto market, particularly Bitcoin. To estimate the impact, the author will begin with the amount of assets under management in various financial sectors and speculate on what portion could be given to BTC.
Galaxy Digital and Charles Yu predict that 10% of participants in each sector will be Bitcoin sensitive, allocating 1% of their portfolio to spot Bitcoin ETFs. This results in 14.4 billion dollars more in the first year, 26.5 billion in the second, and 38.6 billion in the third. Using this data and comparing it to the introduction of ETFs on the gold market, the author calculates a 74% increase in the price of Bitcoin in the first year following the introduction of these ETFs. Starting with the September 30 price of $ 26,920, this would put 1 BTC at $ 46,840.
Galaxy Digital and Charles Yu are unwaveringly bullish about the year 2024, which they believe will see the advent of these ETFs and a rush of financial players to them, raising the valuation and thus the price.