In a potential watershed moment for the crypto market, the Securities and Exchange Commission (SEC) is reportedly gearing up to greenlight spot bitcoin exchange-traded funds (ETFs) later this week. Standard Chartered Bank anticipates these ETFs could attract a staggering $50-100 billion worth of inflows throughout 2024.
Drawing parallels with the introduction of gold ETFs, particularly the SPDR Gold Shares (GLD) in 2004, Standard Chartered analysts, led by Geoffrey Kendrick, suggest that Bitcoin ETFs could follow a similar trajectory. GLD, which revolutionized investor access to the gold market, witnessed $88 billion in inflows within its early years. Adjusting for market caps, the bank predicts Bitcoin ETFs could see around $34 billion in inflows, with an upper range of $130 billion.
Several spot Bitcoin ETF applicants, including VanEck, Galaxy, and Bitwise, also foresee substantial capital pouring into the market. VanEck predicts $1 billion in inflows in the initial days and $2.4 billion within a quarter, while Galaxy anticipates $14 billion within the first year. Bitwise envisions a market size of approximately $72 billion within five years.
Standard Chartered Bank views the potential approval of spot bitcoin ETFs as a pivotal moment in normalizing institutional participation in the Bitcoin market. Additionally, the bank anticipates a significant price surge in Bitcoin by the end of 2025. Comparing it to the trajectory of gold prices post-GLD introduction, the bank suggests that Bitcoin could experience similar gains over a shorter period.
Bitcoin Price Projection: $200,000 by 2025
The bank’s optimistic projection includes a BTC price reaching $200,000 by the end of 2025, contingent on ETF-related inflows materializing as expected. Standard Chartered Bank expects spot ether ETFs to follow suit, with approval anticipated in the second quarter of this year. The SEC’s approach to ether ETFs may differ from BTC, given Chair Gary Gensler’s statement that everything other than BTC could be considered a potential security. However, the bank believes that spot ether ETFs are likely to receive approval.
To provide further insights, the bank draws attention to the historical dynamics of gold and silver ETFs. While gold outperformed post-ETF introduction, silver exhibited strength leading up to its ETF launch before experiencing relative underperformance. Standard Chartered emphasizes that such historical comparisons offer valuable insights into potential price dynamics for both BTC and Ether in the coming years.
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