Bitcoin ETF Approvals Could Boost Crypto Market Cap by $1 Trillion, Predicts CryptoQuant
CryptoQuant, a blockchain analytics company, predicts that the crypto market capitalization could increase by $1 trillion if Bitcoin spot exchange-traded funds (ETFs) are approved. Their calculations suggest that Bitcoin’s market cap might receive an influx of about $155 billion upon this approval.
Bitcoin could potentially become a $900 billion asset with this move. The anticipated surge in institutional interest in Bitcoin ETFs surpasses the investments made in the Grayscale Bitcoin Trust (GBTC) during the last bull market cycle.
The GBTC is currently the world’s most extensive crypto fund, holding assets worth $16.7 billion. The parent organization of Grayscale is the Digital Currency Group, which also owns CoinDesk.
CryptoQuant’s report suggests that if the entities seeking to list Bitcoin ETFs allocate just 1% of their AUM to these ETFs, Bitcoin’s market could see an inflow of around $155 billion. This figure is nearly one-third of Bitcoin’s present market cap.
Such an investment could potentially raise Bitcoin’s value to a range between $50,000 and $73,000.
Bitcoin ETF Impact: Historical Patterns and Contemporary Market Views
Historical data indicates that Bitcoin’s market capitalization usually grows at a rate of 3-5 times its actual investment influx. Thus, for every dollar entering the Bitcoin market, its total market cap might increase by $3 to $5.
Recently, a report by Cointelegraph mistakenly announced the approval of a Bitcoin spot ETF, causing Bitcoin’s price to momentarily soar to $30,000. Markus Thielen, Matrixport’s head of research and strategy, commented on the news, stating that it is unlikely anyone will bet against Bitcoin in the upcoming period.
The optimism around Bitcoin is also reflected in the shrinking GBTC discount, which is now at its lowest in nearly two years. As of the report date, the overall crypto market capitalization was $1.13 trillion, with Bitcoin making up more than half of this value.