9 of the 10 Spot Bitcoin ETFs have absorbed 242,000 BTC in the space of only 23 days. This has now resulted in a positive daily inflow of $631 million as of yesterday.
The newly approved Spot Bitcoin ETFs are literally raining down money onto the crypto market. In the last 4 days the inflows have averaged around $500 million, and it might be argued that this is only going to increase.
This Bitcoin bull market is different
The last three bull markets for Bitcoin and crypto were driven by retail investors. There was the ICO craze that brought money into the market in 2017/2018, and there were the waves of high leverage in 2021/2022 that drove that particular bull market.
However, for this current bull market things are very different. Finally, the institutions are here. After years of that battle cry that “the institutions are coming”, they have now arrived. And the scale of the difference that this is going to make hasn’t been fully comprehended by most investors in this space.
James, YouTuber from the Invest Answers channel, and bitcoin and crypto analyst, puts the case for what he thinks is possibly going to happen to bitcoin over the coming months, given the absolute deluge of positive inflows into the Spot Bitcoin ETFs.
James claims to have analysed the ETF inflows in great detail over the last 23 days, and he says that the results will “melt your faces”, and that “the maths works”.
Gold ETFs are draining into Bitcoin ETFs
The first observation that James makes is that ever since the Spot Bitcoin ETFs were launched, investors have been dumping gold and buying the Bitcoin ETFs. So far, an aggregate of more than $2 billion has left gold ETFs, while over the same period, an aggregate, accumulative $10 billion has flowed into the Bitcoin ETFs (net $4 billion).
In just the last 4 days, $2 billion has flowed into the Bitcoin Spot ETFs. James makes the observation that this would take all the retail investors many months to make the same impact.
Yesterday alone, the Bitcoin ETFs were swelled by 13,000 more BTCs, which is 14.44 times the daily amount of BTCs that are currently mined into the supply, and then when you take the halving into account, this would result in 29 times the daily issuance (should this inflow continue at the same pace).
BTC price forecasts based on $500 million daily inflows
James has come up with his own multiplier, and has based this on an average of $500 million coming into the Bitcoin ETFs every day. He suggests that if only 0.25 of this figure comes into the ETFs every day for the whole of this year, the predicted price of bitcoin would be $173,900 by the end of December.
If the daily inflows are half of the $500 million per day, then the price target for BTC by the end of the year would be $297,800, and if the full $500 million comes in on average per day for the next year, the target for BTC would be a massive $545,600.
Finally, it must be pointed out that for these figures to be arrived at, the money would have to keep flowing, and obviously, there are no certainties here. That said, the Bitcoin ETFs are still in their infancy. The possibility that many, many more institutions, funds, pensions, etc., will continue to allocate at least a small part of their portfolios is arguably quite likely.
Halving effect still to come
And one more thing. The halving is coming in April. This means that the supply will be cut in half, and this could see a doubling effect on all the figures above… is this time different?
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
