Bitcoin (BTC) could see a massive price increase of 74.1% in the first year after the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States, according to a new report by crypto investment firm Galaxy Digital.
The report, published on Oct. 24, estimated that the total addressable market size for Bitcoin ETFs would be $14.4 trillion in the first year, based on the historical performance of gold ETFs and the current market capitalization of Bitcoin.
Bitcoin Price Could Skyrocket After ETF Approval
Using gold ETFs as a benchmark, the report projected that Bitcoin’s price would rise by 6.2% in the first month after an ETF launch, and then gradually decline to 3.7% by month. This would result in a cumulative price increase of 74.1% over the year, taking Bitcoin to over $59,000.
The document also predicted that the market size for Bitcoin ETFs would grow to $26.5 trillion in the second year and $39.6 trillion in the third year, assuming a constant growth rate of 83.3%.
The report acknowledged that its estimates were conservative and did not account for the “second-order effects” of a spot Bitcoin ETF approval, such as increased adoption, innovation, and regulation in the crypto space.
The publication also noted that its projections were contingent on the approval of spot Bitcoin ETFs by the U.S. Securities and Exchange Commission (SEC), which has so far rejected or delayed several applications.
The SEC is currently in the process of examining twelve applications for spot Bitcoin Exchange-Traded Funds (ETFs). These applications have been submitted by a variety of prominent firms, including Grayscale, 21Shares & Ark, BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Galaxy, Fidelity, Valkyrie, Global X, Hashdex, and Franklin.
However, the document expressed optimism that the SEC would eventually approve spot Bitcoin ETFs, citing the recent approval of futures-based Bitcoin ETFs and the growing demand from investors and institutions.
The report concluded that “2024 could be a big year for Bitcoin”, citing the potential inflows from ETFs, the next Bitcoin halving event, and the possibility of lower interest rates.
