Bitcoin continues to reign supreme. Its price dynamics often exhibit a substantial response to market advancements. A recent analysis from Galaxy Digital shed light on a potential price surge after the inception of a spot Bitcoin ETF in the United States. According to their projections, Bitcoin is set to witness a price inflation of 74.1% in the first year after launch.
Projection Analysis: Unveiling the Figures
Galaxy Digital disseminated its findings through a blog post penned by research associate Charles Yu. The focal point of this analysis was to evaluate the Total Addressable Market (TAM) size for Bitcoin ETFs in the year trailing their launch. A staggering $14.4 trillion was the TAM size estimated by Yu. The numbers are derived from a meticulous evaluation of how fund inflows into Bitcoin ETF products could bolster Bitcoin’s price, with gold ETFs as a reference point.
Yu’s analysis revealed that in the first month post the ETF launch, Bitcoin’s price could escalate by 6.2%. However, a slow descent to a 3.7% monthly increment is anticipated by the close of month 12. The price data utilized for this assessment was as of September 30. Therefore, a 74.1% augmentation in Bitcoin’s price would propel it to an impressive $59,200.
Markus Thielen, Matrixport’s Head of Research, corroborated these figures in his post dated October 19. Thielen envisages a Bitcoin price ascent to anywhere between $42,000 and $56,000, contingent upon the approval of BlackRock’s spot Bitcoin ETF application.
Bitcoin ETF Futures Bright, Yet Conditional
Further, Yu anticipates the TAM size for U.S. Bitcoin ETFs to reach an astounding $26.5 trillion in the second year post-launch and $39.6 trillion in the third year. However, these predictions come with a caveat. Any postponement or negation in the approval of spot Bitcoin ETFs could deter this price ascension trajectory.
Nevertheless, Yu contends that these estimations remain on the conservative side. They do not account for the “second-order effects” from a spot Bitcoin ETF approval. He expects that following the U.S. lead, other global markets will soon join the bandwagon, extending similar Bitcoin ETF offerings to a broader investor base.
In his closing remarks, Yu prophesizes 2024 as a monumental year for Bitcoin. He cites the influx of ETFs, the impending Bitcoin halving event in April 2024, and a potential plateau in rates as pivotal factors converging to foster a conducive environment for Bitcoin’s price appreciation.