Crypto investment firm Galaxy Digital made a statement about what level will come for Bitcoin. Accordingly, he predicted that spot Bitcoin ETFs in the United States could experience a significant price increase of 74.1% in the year following their launch. This optimistic outlook is based on the potential impact of fund inflows into Bitcoin ETFs. He also compares this to the success of gold ETFs. Galaxy Digital’s research assistant Charles Yu covered the issue in a blog post. He estimates that the market size of Bitcoin ETFs in their first year could reach a staggering $14.4 trillion.
Potential impact of Bitcoin ETFs:
The launch of spot Bitcoin ETFs will be a game changer for the cryptocurrency market. Galaxy Digital believes these ETFs will offer a more efficient investment vehicle compared to existing options such as Trusts and futures, which currently have a total value of over $21 billion. The company says that fund inflows will reach $27 billion in the second year. He also predicts that it could reach 39 billion dollars in the third year.
The US asset management industry stands to gain significantly from the launch of Bitcoin ETFs. Galaxy Digital describes it as the most direct market to benefit from this development, as assets managed by broker-dealers, banks and registered investment advisors (RIAs) total $48.3 trillion as of October 2023.
Investor accessibility and expectations
Spot Bitcoin ETFs provide investors with a legal vehicle to invest in BTC. It is expected that these products will provide strong customer protection by collaborating with traditional financial institutions. It is also likely to provide a variety of investment offers. Recent market reactions, such as significant price increases triggered solely by rumors and announcements, are notable. Accordingly, the developments emphasize the high demand for such investment instruments.
Galaxy Digital points out the limitations of current investment products, such as high fees, low liquidity and tracking errors, which deter a broad investor base. A spot ETF provides a direct path for investors to access Bitcoin without the need for self-custody and asset management. There is also the potential for lower wages and greater competitiveness.
US SEC scrutiny and global impact
The US Securities and Exchange Commission (SEC) is reviewing 12 spot Bitcoin ETF applications. Galaxy Digital states that its estimates are conservative. He remains optimistic, arguing that he did not take into account “second-order effects” that could follow Bitcoin ETF approval. The firm predicts that other global markets will offer similar offers, further increasing Bitcoin’s appeal.
As Kriptokoin.com, looking ahead, 2024 is an important year for potential ETF entries. There is also Bitcoin’s halving in April 2024. On the other hand, there are also possible changes in interest rates. All these are important developments for the Bitcoin price. Galaxy Digital’s predictions show the growing importance of ETFs as the driving force behind Bitcoin’s price rise.
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