As per Galaxy Digital, there is an anticipated 74% surge in the price of bitcoin over the first year following the introduction of the bitcoin ETF. In particular, my prediction would push the price of bitcoin much over $59,000.
Moreover, Galaxy Digital notes that “second-order effects” are not included in this assessment. See the details in full below.
Galaxy explains the positive bitcoin ETF projection
According to Galaxy Digital’s projection, the price of Bitcoin is predicted to increase by 74.1% in the first year following the introduction of bitcoin spot exchange-traded funds (ETFs) in the US.
In a blog post on October 24, Charles Yu, a research associate at Galaxy Digital, projected that the first year after launch, the entire potential market size for bitcoin-based exchange-traded funds (ETFs) would be $14.4 trillion.
Using gold ETFs as a benchmark, the predicted price impact of investing in bitcoin ETFs was evaluated, leading to the 74% prediction.
According to Yu’s projections, the price of bitcoin will rise 6.2% in the first month following the launch of an ETF before trending downward over the following months and increasing by 3.7% each month by the 12th month.
Furthermore, a 74.1% increase would bring the price of bitcoin to $59,200 based on statistics from September 30.
Bitcoin ETFs’ possible impact: 2024 might be a turning point for the cryptocurrency
A similar forecast was made on October 19 by Markus Thielen, head of research at Matrixport, a financial services provider for digital assets. He said that if BlackRock’s proposal for spot ETFs on bitcoin is approved, the price of bitcoin may rise from $42,000 to $56,000.
Yu additionally forecasts that the US market for Bitcoin ETFs will have a potential size of $26.5 trillion in the second year following introduction and $39.6 trillion in the third.
Charles Yu admitted that his price prediction might be impacted by the tardiness of spot ETF approvals or rejections on bitcoin.
He made it clear, though, that his projections are still conservative and do not fully account for the “second-order effects” that the approval of bitcoin ETFs will have.
Yu anticipates that other international markets will soon follow the US lead and authorise bitcoin exchange-traded funds (ETFs), opening them up to a larger pool of investors.
In closing, he emphasised that “2024 could be a pivotal year for Bitcoin,” citing the inflow of capital into exchange-traded funds (ETFs), the anticipated halving of Bitcoin in April 2024, and the potential short-term peaking or reaching of interest rates.
An important first step towards a bitcoin ETF is the launch of the iShares Bitcoin Trust (IBTC)
A good wave has been formed in the cryptocurrency markets due to the expectation of a bitcoin exchange traded fund (ETF), as we have previously reported. BlackRock, the largest asset manager in the world, is driving this trend with the proposed iShares Bitcoin Trust.
The long-awaited approval of a bitcoin ETF in the US has advanced significantly with the listing of IBTC under the ticker IBTC on the Depository Trust and Clearing Corporation (DTCC) website.
As observed by Bloomberg Intelligence’s senior analyst Eric Balchunas, IBTC is the first spot bitcoin ETF to be launched on the DTCC.
One of the main prerequisites for automating the creation, redemption, and settlement of ETF shares is the National Securities Clearing Corporation (NSCC), a subsidiary of DTCC, which operates a clearing process for ETFs that offers simpler verification of ETF portfolio components.
Important participants on the path to a bitcoin ETF include Ark Invest and 21Shares, who have modified their plans in response to a positive discussion with the Securities and Exchange Commission (SEC), clearing the way for a more transparent regulatory structure.
In an effort to turn the Bitcoin Trust (GBTC) into a spot exchange-traded fund (ETF), Grayscale filed to register the trust under the Securities Act of 1933, marking a significant advancement in the process.
The DC Circuit Court of Appeals’ critique of the SEC’s previous denial supported this action.
With each of these formidable financial organisations overcoming administrative obstacles and satisfying regulatory requirements, the mainstream acceptance of bitcoin draws nearer, which will be advantageous for both its price and the future of the cryptocurrency market.
But for the time being, nothing is guaranteed.
