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 a remarkable increase in value over the past week, aiming to cross the significant $30,000 threshold. The cryptocurrency has been affected by the activities of a spot Bitcoin Exchange Traded Fund (ETF) as investors continue to wait for approval to onboard institutional and mainstream exposure to the digital assets.
Bitcoin is trading at $56,000
Matrixport has conducted an analysis in the newly released version reportexamining 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 accelerated in recent months, with many now expecting the green light from the SEC.
The report draws a close parallel to the $120 billion precious metals ETF industry. If just 10 to 20% of investors in precious metals ETFs were to diversify their holdings into Bitcoin ETFs, this would result in an inflow of $12 billion to $24 billion into these investment vehicles.
According to Matrixport, an approval, specifically a BlackRock Bitcoin ETF filing, would increase the market cap of leading stablecoin USDT by as much as $50 billion. This in turn would cause Bitcoin’s price to rise to $56,000, with Tether acting as an intermediary and facilitating the inflow of investments into BTC.
“Our previous reports analyzed the 15,000 members of the U.S. Registered Investor Advisor (RIA) community who oversaw approximately $5 trillion. This group has enormous potential, and even a modest 1% allocation recommendation for Bitcoin would herald inflows of approximately $50 billion,” the report said.
A smaller inflow of $24 billion into Tether would see BTC rise to $42,000 in the near term. With BTC currently trading at $29,370 with a market cap of $625.03 billion, this represents an upside 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?
Bitcoin’s price has always reacted to news of spot Bitcoin ETFs. Just news about applications from BlackRock, Fidelity and other investment companies BTC sent an upward trend. Recently, rumors The SEC’s approval of BlackRock’s ETF application threw the industry into turmoil, with $74 million in BTC holdings were liquidated in just a few minutes.
There is no denying how much capital a Bitcoin ETF would unlock for the crypto industry. If approved, a spot Bitcoin ETF could be a huge capital inflow from institutional investors, to $17.7 trillion of financial institutions.
According to Fundstrat co-founder Tom LeeSpot ETFs could push BTC to $150,000 or perhaps even further by the end of next year.
Featured image from Forkast News, chart from Tradingview.com