“The potential influx of $50,000,000,000 in capital into Bitcoin within the first five years after the ETF launch could reshape the cryptocurrency landscape, making it a force to be reckoned with in the global financial markets,” predicts Bitwise CEO Matt Hougan.
The CEO of Bitwise, the world’s largest crypto index fund manager, predicts that a spot Bitcoin exchange-traded fund (ETF) could attract $50 billion within years of its launch. Matt Hougan explains that in the first year, around $5 billion could flow into the product. He also believes that within the first five years, a spot BTC ETF could attract $50 billion in total.
Hougan bases his estimates on the fact that Bitcoin ETFs typically make up about 1% of the market when they mature. Considering that the US ETF market is valued at $7 trillion and the Grayscale Bitcoin Trust already holds $20 billion, there is potential for a significant influx of new demand.
Although the impact of a spot BTC ETF on the value of Bitcoin is uncertain, Hougan suggests that it could lead to increased demand. He mentions that a study by ARK Investment Management estimates a 15x multiplier effect, but he does not endorse this specific finding.
Ultimately, Hougan encourages investors to consider the combination of new ETF demand and the decreased supply resulting from the Bitcoin halving when thinking about the cryptocurrency’s future over the next few years.
At the time of writing, Bitcoin is trading at $34,594.