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Bitcoin price may surge 74.1% to more than $59K during the first year after spot Bitcoin ETFs (exchange-traded funds) are approved in the US, says crypto investment firm Galaxy Digital.
Inflows of $14 billion are likely in the first year, ramping up to $27 billion in the second year and $39 billion the year after, said research associate Charles Yu.
He sees Bitcoin price rising 6% in the first month before monthly gains are pared to about 3.7% by the last month of the first year.
Approval for a US-regulated spot #Bitcoin ETF will be one of the most impactful catalysts for the adoption of Bitcoin.
In our latest report, we estimate potential new incremental inflows into Bitcoin investment products ranging from ~$125bn to ~$450bn: https://t.co/1FCl7rpv1E
— Galaxy (@galaxyhq) October 24, 2023
Yu further predicts that the US Bitcoin ETF market size will grow to $26.5 trillion during the second year after an ETF launches, and increase to $39.6 trillion after the third year.
Besides ETF approvals, BTC’s rally in 2024 could also be driven by the halving event and the likelihood that interest rates will have peaked.
Bitcoin is up by 21% in the past week, driven higher by optimism over the approval of about a dozen applications for spot Bitcoin ETFs. While the Securities and Exchange Commission has yet to approve such a product, investors are increasingly optimistic that it is only a matter of time before it gives the green light.
Bitcoin To Post More Gains on Adoption
Yu said that his estimates for Bitcoin price are conservative and don not take into account the “second-order effects” of the approval of a spot Bitcoin ETF. If the approvals do causes ripple effects, such as ETF approvals in other global markets, the price will likely roar past his 74% estimate.
“In the near-term, we expect other global/international markets to follow the US in approving + offering similar Bitcoin ETF offerings to a wider population of investors,” Yu said.
The US wealth management industry is valued at about $48 trillion. Yu estimates that an ETF will help ease some of these institutional inflows into the market as fund managers increase their exposure to Bitcoin.
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