Crypto financial services platform Matrixport has predicted that an approval of a spot Bitcoin ETF by the US Securities and Exchange Commission (SEC) could push the price of Bitcoin between $42,000 and $56,000 per unit.
BTC, the world’s largest cryptocurrency, has experienced notable increases in value throughout the current week, with the aim of surpassing the significant threshold of $30,000. The cryptocurrency has been influenced by the operations of a spot Bitcoin Exchange Traded Fund (ETF) as investors continue to await approval to onboard institutional and mainstream exposure to the digital asset.
Bitcoin Is Headed For $56,000
Matrixport conducted an analysis in its newly released report, examining the potential effects of a spot Bitcoin exchange-traded fund (ETF) on the cryptocurrency market, with a specific focus on BTC. Applications for these investment vehicles have gained momentum in recent months, with many now expecting a green light from the SEC.
The report draws a parallel close to the $120 billion precious metals ETF industry. If just 10–20% of investors in precious metal ETFs diversified their holdings into Bitcoin ETFs, it would result in an influx of $12b billion to $24 billion into these investment vehicles.
According to Matrixport, an approval, particularly a BlackRock Bitcoin ETF application, would see leading stablecoin USDT increase by as much as $50 billion in market cap. This, in turn, would lead to Bitcoin’s price rising to $56,000, with Tether acting as an intermediary facilitating the inflow of investments to BTC.
“Our earlier reports analysed the 15,000-strong US registered investor advisor (RIA) community overseeing around $5 trillion. This group holds immense potential, and even a modest 1% allocation recommendation for Bitcoin would usher in around $50 billion in inflows,” the report said.
A lesser influx of $24 billion into Tether would see BTC rise to $42,000 in the short term. With BTC currently trading at $29,370 with a market cap of $625.03 billion, this represents an increase of 90% and 43% in both scenarios.
BTC readies to break $30,000 | Source: BTCUSD on Tradingview.com
What’s Next For BTC? Is A Rally Inevitable?
The price of Bitcoin has always reacted to news regarding spot Bitcoin ETFs. Just news of applications from BlackRock, Fidelity, and other investment companies sent BTC surging. Recently, rumors that the SEC had approved BlackRock’s ETF application sent the industry into a frenzy, and $74 million worth of BTC positions were liquidated in just a few minutes.
There’s no denying the amount of capital a spot Bitcoin ETF would unlock for the crypto industry. If approved, a spot Bitcoin ETF could unlock a massive inflow of capital from institutional investors, up to $17.7 trillion from financial institutions.
According to Fundstrat co-founder Tom Lee, spot ETFs could push BTC to $150,000 or maybe even further by the end of next year.
Featured image from Forkast News, chart from Tradingview.com