- Several crypto experts have predicted that billions of dollars of inflows could be attracted into the market after the spot ETF approval.
- Others also believe that the predicted capital inflows are outrageous, and make the ETF a sell-the-news event.
The spot Bitcoin Exchange-Traded Fund (ETF) decision is expected to be made today as investors await with bated breath. The approval could trigger the inflow of billions of dollars into the market with Standard Chartered Bank predicting between $50 billion to $100 billion of capital inflow in 2024.
Expected Inflows After Spot Bitcoin ETF Approval
It is estimated that between 437,000 and 1.32 million new BTCs will be held in the US ETFs by the year-end. The price is also expected to stage a bull run in response to the approval as the Bank targets $100,000 by the end of this year. By the end of 2025, the asset could double that price point to hit $200,000 according to the report.
The report based its prediction on the gold exchange-traded product launched in 2004. After the launch, the price of gold surged by 4x within the seven-year maturity period. Standard Chartered Bank has high hopes that Bitcoin could replicate the same as the anticipation alone caused the price to rise by 155 percent last year.
Crypto experts including Will McDonough, chairman and founder of Corestone Capital have also confirmed that the approval could increase demand for Bitcoin. According to him, around $1 billion worth of inflows would be recorded in the market by the end of the first quarter of this year.
The obstacle of self-custody has kept many investors out of the asset class, approving a 40 Act structure that can give investors exposure in their traditional brokerage accounts, means the demographic of investors that can allocate even just 1% of their portfolio to this growing alternative asset class is exponential, and I think price activity (given the fixed supply of Bitcoin) will be just as big.
Galaxy Digital has also predicted that the first year of ETF issuance could attract $14.4 billion of inflows in the first year.
Bitcoin (BTC) had an interesting run in the last three months as it surged by 71% to trade at $46,045.35. However, the asset has declined by 1.7% in the last 24 hours.
Some Experts Speak on ETF News-Selling-Event
The previous price surge was linked to the expectation that the US Securities and Exchange Commission could rule in favor of the asset managers. However, analysts believe that the slight fall in the past 24 hours could be that the ETF news is priced in. Noelle Acheson, author of the ‘Crypto is Macro Now’ newsletter commented on the capital inflow predictions. According to her, “there are a lot of uncertainties,” and could be hard to easily predict.
It is reported that several fake tweets created an impression of an upcoming approval, causing demand to rise and leading to a subsequent price surge. However, most investors exited their positions after realizing that most of the ETF tweets were just meant to create fake hype.
the etf was priced in so we sold off on the fake approval, and people saw that it was a news selling event so they sold even after the fake approval was exposed in anticipation of news selling on approval tomorrow, but that means we sold off enough already so the approval… pic.twitter.com/k4rkGCU7VY
— nic
carter (@nic__carter) January 9, 2024
Roshun Patel, partner at Hack VC also commented on this:
Short term though, could you see some rotation back from BTC into ETH and the ‘next ETF’ narrative once [a bitcoin ETF]is live? Sure, but over more investable time horizons, the impact it has on flows is hard to know down to the dollar today. It can really only surprise the upside. Dollars are infinite after all.
