A new report from Matrixport, a crypto financial services platform, suggests that the approval of a Bitcoin exchange-traded fund (ETF) by BlackRock, the world’s largest asset manager, could have a significant impact on the price of Bitcoin.
According to the report, a Bitcoin ETF would provide an easier and more regulated way for institutional investors to enter the crypto market, which could lead to a surge of capital inflows.
The report estimates that if Tether’s (USDT) market cap increases by $24 billion, acting as a proxy for potential ETF inflows, Bitcoin’s price could rise to $42,000, representing a conservative scenario.
Another Report Predicts Bitcoin’s Price to Skyrocket
However, if a more aggressive influx of $50 billion occurs due to the 1% allocation recommendation by registered investment advisors (RIAs), Bitcoin could potentially rally to $56,000. The report also draws a parallel with the precious metals ETFs, which have a market cap of approximately $120 billion.
Assuming that between 10-20% of precious metal ETF investors would consider a Bitcoin ETF to diversify their portfolios and hedge against inflation, the crypto market could potentially witness additional inflows of $12-24 billion.
The report’s projections are based on the historical evidence that the approval of traditional ETFs has often coincided with increased investor interest and price appreciation for the underlying assets.
For instance, the report cites the example of Grayscale Investments’ Bitcoin Trust (GBTC), which has outperformed Bitcoin by 167% year-to-date, indicating growing institutional demand for crypto exposure.
While the crypto community is eagerly awaiting the approval of a spot Bitcoin ETF, the US Securities and Exchange Commission (SEC) has not yet given its green light. The SEC Chairman Gary Gensler has recently stated that the applications are subject to extensive review and deliberation within the SEC’s divisions.
However, the announcement of BlackRock’s ETF application in June has raised hopes and expectations among crypto enthusiasts and investors. If approved, BlackRock’s ETF could be a game-changer for the crypto industry and pave the way for more innovation and adoption.
