10/20 update below. This post was originally published on October 19
Bitcoin BTC and crypto markets are set for a massive shock, with one high-profile billionaire warning that he is hoarding gold and bitcoin due to the “cataclysmic” situation facing the US dollar.
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The bitcoin price was rocked this week by a viral, fake report that a long-awaited bitcoin spot exchange-traded fund (ETF) had been approved by the US Securities and Exchange Commission (SEC), sending ethereum, XRP XRP and crypto market chaos. even as the US dollar teeters on the brink of “collapse”.
Now bitcoin and crypto price models have revealed that bitcoin’s market cap could rise if a US bitcoin spot ETF is approved – potentially adding $1 trillion to the broader ethereum, XRP and crypto market value.
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The bitcoin and crypto market is primed for a major price earthquake after the bitcoin price … [+]
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“The next wave of bitcoin institutional adoption appears to be advancing primarily in the form of financial institutions offering access to bitcoin investments to their clients through ETFs,” analysts with data company CryptoQuant wrote in a report, pointing to the likes of BlackRock BLK and Grayscale, which runs the Greyscale bitcoin trust (GBTC), as the leader of the charge.
10/20 Update: The bitcoin price and larger crypto market, including ethereum and XRP, edged higher as expectations soared again that a full-fledged bitcoin ETF in the US is only months away. JPMorgan analysts are the latest to raise their forecast, saying they expect the US Securities and Exchange Commission (SEC) to approve several spot bitcoin ETF applications “within months.”
“The timing of spot bitcoin ETF approvals remains unclear, but should happen within months and most likely before January 10, 2024, the final deadline of Ark Invest and 21Shares applications,” JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a note spotted by The Block. . “This is the earliest among the various final deadlines SEC faces on spot bitcoin ETF filings.”
The bitcoin price added 5% in the past 24 hours, breaking through the $30,000 per bitcoin barrier for the first time since mid-August.
$1.5 trillion manager Franklin Templeton filed with the SEC last month for a bitcoin spot ETF, joining a wave of filings kicked off in June by the world’s largest asset manager BlackRock and including Wall Street giants Fidelity, Invesco Galaxy, WisdomTree in.
Since then, the SEC has been instructed by US lawmakers to reconsider Grayscale’s application to convert its flagship bitcoin trust into a full-fledged bitcoin spot ETF.
“The potential for fresh money entering the bitcoin market through these mock ETFs would dwarf the amount of money that flowed into the GBTC fund, the largest bitcoin fund in existence, in the last cycle,” the researchers wrote .
They calculated that during the bitcoin price from $10,000 to $64,000, “the GBTC fund saw its realized capitalization increase by $5.5 billion, only 4% of the potential $155 billion that the launch of these mock ETFs in the market can bring.”
Inflows into the $155 billion bitcoin market, just 1% of the funds’ total assets under management, could push the bitcoin price to between $50,000 and $73,000, CryptoQuant predicted, with bitcoin’s market capitalization rising between 82% and 165 % rise.
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The 2021 bitcoin price rally added just $5.5 billion to the GBTC market cap.
CryptoQuant
Last week, the US SEC declined to appeal a court order ordering it to re-examine Grayscale’s ETF application, with investors increasingly betting that the crypto-asset manager will ultimately be successful.
“This news was well received by investors, particularly reflected in the narrowing discount of the Grayscale Bitcoin Trust (GBTC),” Matteo Greco, research analyst at cryptoinvestor Fineqia, said in an emailed comment, noting that the discount-narrowing trend started in the middle of the year. June 2023 when BlackRock filed for its bitcoin spot ETF — “at the time the GBTC discount was about 43%.”
“The significant reduction in the discount over the past few months, following Grayscale’s favorable outcomes against the SEC in court, reflects growing investor confidence in the possibility of Spot ETF approval in the future. In particular, the first final deadline for bitcoin spot ETF approval or denial is set for January 10, 2024, with respect to the ARK 21Shares filing, including BlackRock’s, next deadlines are scheduled for mid-January, with the latest potential deadline for mid-March.
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