Matrixport Research has released a report predicting the potential impact of the BlackRock Bitcoin ETF, highlighting a conservative estimate of BTC reaching $42,000 upon approval, with the possibility of soaring to $56,000 if $50 billion in funds flow in.
Entitled “Bitcoin ETF Approval Sets Stage for Massive $24-50 bn Fiat Rush,” the report follows Matrixport’s bold 2023 outlook, which foresaw a significant crypto rally driven by factors like reduced US inflation and favorable macroeconomic conditions. Not only did it anticipate robust rebounds for BTC and Ethereum, but it also foresaw a notable drop in volatility.
The report draws attention to the remarkable performance of GBTC (Grayscale Investments’ Bitcoin Trust), which surged by an impressive 167% year-to-date, outperforming BTC’s 71% growth. The turning point occurred when BlackRock announced its ETF application on June 15, 2023.
Matrixport’s earlier reports had analyzed the vast potential of the 15,000-strong US registered investor advisor (RIA) community overseeing approximately $5 trillion. A modest 1% allocation recommendation for BTC from this group could bring about a substantial $50 billion influx.
Drawing parallels with precious metals ETFs, which have a market cap of around $120 billion, and assuming a 10-20% shift from precious metal ETFs to Bitcoin ETFs, we could witness inflows ranging from $12-24 billion.
The BlackRock Bitcoin ETF’s potential approval could significantly impact the market. A $24 billion increase in Tether’s market cap, acting as a proxy for ETF inflows, would push BTC’s price to $42,000. With an even larger influx of $50 billion from RIAs, BTC’s price could rally to $56,000.
Analysts’ Insights On Bitcoin’s ETF Frenzy
In contrast to the excitement generated by a false spot Bitcoin ETF approval report, analysts warn that the real approval’s impact might be less dramatic. The low recent volatility in BTC’s price suggests that much of the excitement surrounding the ETF approval is already factored into the price. Analysts expect the ETF’s impact to be realized over an extended period rather than an immediate surge in capital inflows.
Enigma Securities pointed out the significance of the spot Bitcoin ETF, with many market participants eagerly awaiting its approval. Still, they caution that it could lead to a “sell the news” event, with BTC’s price initially spiking before experiencing a decline. It underlines the importance of cautious evaluation as the cryptocurrency market eagerly awaits the potential BlackRock Bitcoin ETF approval.
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