The crypto investment firm Galaxy Digital estimates that the price of Bitcoin (BTC) will increase by 74.1% in the first year after spot Bitcoin exchange-traded funds (ETFs) are launched in the United States.
In a blog post on October 24, Galaxy Digital research associate Charles Yu projected that the total addressable market size for Bitcoin ETFs would be $14.4 trillion in the first year. He arrived at the 74% figure by considering the potential impact of fund inflows to Bitcoin ETF products, using gold ETFs as a benchmark.
According to Yu’s estimates, Bitcoin’s price would rise by 6.2% in the first month after the ETF launch and gradually decrease, reaching a monthly increase of 3.7% by the twelfth month.
Yu based his calculations on Bitcoin price data from September 30, stating that a 74.1% increase in Bitcoin’s current price would result in a value of $59,200.
In an October 19 post, Markus Thielen, head of research at Matrixport, also predicted a similar increase in Bitcoin price, estimating it could reach between $42,000 and $56,000 if BlackRock’s spot Bitcoin ETF application is approved.
Yu further forecasts that the addressable market size for US Bitcoin ETFs will reach $26.5 trillion in the second year and $39.6 trillion in the third year after launch.
Yu acknowledges that a delay or denial of spot Bitcoin ETFs could impact the predicted price increase.
Nevertheless, he considers the estimates conservative and does not take into account the “second-order effects” of a spot Bitcoin ETF approval.
“In the near-term, we expect other global/international markets to follow the US in approving and offering similar Bitcoin ETF offerings to a wider population of investors,” Yu wrote.
He also suggested that “2024 could be a big year for Bitcoin,” citing ETF inflows, the April 2024 Bitcoin halving, and the possibility of interest rates peaking or having already peaked in the near term.
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