Galaxy Digital Predicts Significant Price Increase
According to crypto investment firm Galaxy Digital, the price of Bitcoin (BTC) is projected to rise by 74.1% within the first year of the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States. In a recent blog post, Charles Yu, a research associate at Galaxy Digital, estimated that the total addressable market size for Bitcoin ETFs would reach $14.4 trillion in the first year after launch. This estimation was based on an assessment of the potential price impact of fund inflows, using gold ETFs as a benchmark.
Gradual Increase Over Time
Yu's analysis suggests that Bitcoin's price would initially increase by 6.2% in the first month after an ETF launch, before gradually trending downward to a 3.7% monthly increase by the twelfth month. While Yu used Bitcoin price data from September 30, a 74.1% increase in the current price of Bitcoin would result in a value of $59,200.
Similar Predictions from Other Experts
Markus Thielen, the head of research at Matrixport, a digital asset financial services firm, reached a similar conclusion in an earlier post. Thielen estimated that if BlackRock's spot Bitcoin ETF application is approved, Bitcoin's price could rise to between $42,000 and $56,000.
Future Outlook
Yu predicts that the addressable market size for US Bitcoin ETFs will reach $26.5 trillion in the second year after launch and $39.6 trillion after the third year. He also believes that other international markets will follow the US in approving and offering similar Bitcoin ETF products to a wider population of investors. Yu concludes by stating that 2024 could be a significant year for Bitcoin, with factors such as ETF inflows, the April 2024 Bitcoin halving, and the possibility of interest rates peaking in the near term.
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