Spot Bitcoin ETF May Add $30 Billion in Demand, NYDIG Says

Updated: 20 July 2023

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New York Digital Investment Group (NYDIG) has predicted that the approval of Spot Bitcoin ETFs could result in an influx of $30 billion in new demand for $BTC.

As $BTC is frequently likened to gold, the crypto trading firm believes valuable insights can be gleaned from the successful listing of the first Gold ETF.

NYDIG’s Optimistic Outlook

NYDIG’s research report forecasts that Bitcoin spot-based exchange-traded funds (ETFs) could generate a substantial $30 billion influx of new demand for the leading cryptocurrency, following recent filings by prominent firms like BlackRock and Fidelity.

Everything you need to know about the spot bitcoin ETF race in one beautiful table by ⁦@JSeyff pic.twitter.com/fWPSdFEO8M

— Eric Balchunas (@EricBalchunas) July 11, 2023

BlackRock’s surprise filing for a spot Bitcoin ETF has sparked excitement and a 20% surge in Bitcoin’s value, with investors eagerly awaiting approval for the first spot ETF in the US in over a decade.

NYDIG has studied the potential implications of this decentralized financial product, which already competes with existing structures such as trusts, futures-based ETFs, and spot-based ETFs outside the US, with $28.8 billion in assets under management (AUM) invested.

A spot ETF offers advantages like investor protections, institutional credibility, simplicity in reporting, and potentially better liquidity and lower costs compared to other options.

NYDIG Insights From Listing of First Gold ETF

NYDIG highlights the need to assess gold’s supply and ownership compared to Bitcoin (BTC), as gold ETFs hold 1.6% of the global supply while central banks own 17.1%, whereas Bitcoin funds hold 4.9% of its total supply.

Despite gold ETFs having a total AUM of over $210 billion globally, with $107.3 billion in North America, Bitcoin funds only have a total AUM of $28.8 billion.

Additionally, Bitcoin exhibits 3.6 times more volatility than gold, suggesting potential demand for approximately $30 billion worth of Bitcoin ETFs. While the path to a spot Bitcoin ETF may face challenges, insights from the history of gold ETFs can provide valuable guidance.