CryptoQuant’s report emphasizes that upon the activation of ETFs, Bitcoin‘s market capitalization will surge to a staggering $900 billion, effectively pushing the cryptocurrency market to a total value of $1 trillion.
Bitcoin ETFs Are Set to Be a Game-changing Development in the Cryptocurrency Arena
Let’s rewind to the period of 2020-2021 when the digital asset market started gaining momentum. This was evident as many major institutions began accepting Bitcoin and adding it to their balance sheets.
So far, the next wave has not materialized. However, when financial institutions allow customers access to Bitcoin through immediate exchange-traded funds (ETFs), a new, potentially even larger wave could hit the cryptocurrency market, which is currently dealing with numerous uncertainties and doubts.
As of now, many major financial institutions in the United States have submitted applications to launch Bitcoin ETFs, with the latest possible start date being in March 2024, pending SEC approval.
Previously, the SEC decided not to appeal the court’s decision regarding Grayscale’s spot Bitcoin ETF application. This indicates a more open approach by the regulatory body toward assets related to Bitcoin ETFs.
The Potential Capital Inflow Surrounding Bitcoin ETFs
CryptoQuant’s analysis, suggests that if ETF issuers allocate 1% of Assets Under Management (AUM) to these ETFs, they will directly inject $155 billion into Bitcoin’s market value. This cash flow is equivalent to nearly one-third of Bitcoin’s current market capitalization, potentially driving the price of Bitcoin to $73,000.
This prediction is considered reasonable when looking at historical data, as Bitcoin’s market capitalization typically increases by a factor of 3 to 5 compared to its actual capitalization. Specifically, for every $1 invested in the Bitcoin market, the market capitalization can increase by $3 to $5, a remarkable growth potential for any asset class.
Previously, some parties claimed that the U.S. Securities and Exchange Commission (SEC) had finally given the green light for Bitcoin’s immediate exchange-traded funds. Despite ongoing uncertainty about the news, the price of BTC immediately surged to around $30,000.
The approval of Bitcoin’s immediate exchange-traded funds promises to attract significant investment and contribute to the expansion of the cryptocurrency market. However, the SEC continues to delay decisions on launching the immediate Bitcoin ETF projects of many leading companies.