If the SEC approves BTC spot ETFs, the market value of Bitcoin may soar to $950 billion, potentially injecting $155 billion into the market.This approval may result in a price increase of $50000 to $73000 for Bitcoin, surpassing Grayscale's $5
- If the SEC approves BTC spot ETFs, the market value of Bitcoin may soar to $950 billion, potentially injecting $155 billion into the market.
- This approval may result in a price increase of $50000 to $73000 for Bitcoin, surpassing Grayscale's $5.5 billion market value increase.
- The SEC's ruling on ETF applications from ARKInvest, BlackRock, and other companies before March 2024 may push Bitcoin prices to exceed previous increases.
If the US Securities and Exchange Commission (SEC) approves Bitcoin Spot Exchange Traded Funds (ETFs), the market value of Bitcoin (BTC) may rise to $950 billion. By investing 1% of its $15.6 trillion in assets, ETF approval can inject $155 billion into the market.
This will increase the realized market value of Bitcoin (calculated by adding the purchase prices of all existing Bitcoins). History shows that during periods of significant capital inflows, Bitcoin's market value has grown faster than its realized market value, which means that an increase of $155 billion in realized market value may result in a market value between $465 billion and $955 billion.
Bitcoin ETF inflows may overshadow grayscale
This increase will correspond to the rise in Bitcoin prices to $50000 to $73000.
This will dwarf the $5.5 billion market value growth achieved by Grayscale Investments' Bitcoin Trust during the previous bull market. During this period, Bitcoin increased from $10000 to $64000 and later reached a peak of $66000.
Bitcoin spot ETFs allow institutions to provide regulated Bitcoin exposure to their customers. So far, institutions in the United States that require regulated tools have invested in Bitcoin futures ETFs managed by companies such as ProShares and VanEck.
When launched in 2013, the grayscale Bitcoin Trust provided institutions with the only way to invest in regulated Bitcoin tools. The inflow of funds also contributed to the previous bull market, but has since been hindered by the nature of its closed-end fund.
It is expected that the SEC will make a ruling on ETF applications from companies such as ARKInvest and BlackRock before March 2024. The deadline for ARK is January, while other companies are expected to respond between March 4th and March 18th, 2024.
Delayed approval of SECETF is a good thing
Some voices in the investment industry suggest that the delay by the US Securities and Exchange Commission may lead to its simultaneous approval of multiple ETFs. Eric Balchunas, an analyst at Bloomberg, believes that the shift from outright rejection to a lengthy approval process seems to be a positive sign.
In fact, the US Securities and Exchange Commission is actively engaging with spot Bitcoin issuers regarding their current application - which has never happened before - and we believe that the likelihood of rejection is low, with a 75% chance of approval by the end of this year
Martin Bednall, former executive of BlackRock and current CEO of Jacobi Asset Management, believes that the SEC does not want to be seen as a supporter due to its preference for certain applications over others.
I think the SEC may approve all applications simultaneously. I don't think they want to give anyone a first mover advantage
If the majority of approvals occur before March, the inflow of funds may drive the price of Bitcoin to increase by more than the previously predicted halving of Bitcoin. After the next halving (scheduled to occur in the spring of 2024), the rise in Bitcoin prices will bring much-needed relief to miners, and halving will slow down the speed at which new Bitcoin enters circulation.
The increase in Bitcoin prices will offset the losses incurred by miners due to reduced block rewards. This may also lead to the survival of smaller mining companies, which have traditionally gone bankrupt due to narrowing profit margins.
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