“Galaxy’s prediction of a staggering 74% Bitcoin price increase in the first year following the launch of an ETF is not only captivating but also highlights the immense potential and growing mainstream acceptance of cryptocurrencies.”
Bitcoin’s price is predicted to increase by 74.1% in the first year after spot Bitcoin exchange-traded funds (ETFs) are launched in the United States, according to estimates from crypto investment firm Galaxy Digital. In a recent blog post, Galaxy Digital research associate Charles Yu estimated that the total addressable market size for Bitcoin ETFs would be $14.4 trillion in the first year after launch. This estimate was based on assessing the potential price impact of fund inflows to Bitcoin ETF products using gold ETFs as a baseline.
According to Yu’s estimates, 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 month 12. The figures were based on Bitcoin price data from Sept. 30, and a 74.1% increase in Bitcoin’s current price would result in it reaching $59,200.
Markus Thielen, head of research at digital asset financial services firm Matrixport, also reached a similar figure in a recent post, estimating that Bitcoin could rise to between $42,000 and $56,000 if BlackRock’s spot Bitcoin ETF application is approved.
Yu predicts that the U.S. Bitcoin ETFs’ addressable market size could reach $26.5 trillion in the second year after launch and $39.6 trillion after the third year. However, he acknowledged that a delay or denial of spot Bitcoin ETFs would impact his price prediction. Despite this, he believes that the estimates are still conservative and do not factor in the potential “second-order effects” from a spot Bitcoin ETF approval.
Yu further stated that in the near-term, he expects other global markets to follow the U.S. in approving and offering similar Bitcoin ETF offerings to a wider population of investors. He believes that 2024 could be a significant year for Bitcoin, citing ETF inflows, the April 2024 Bitcoin halving, and the possibility that interest rates have peaked or will peak in the near term as contributing factors.
Overall, the predictions for Bitcoin’s price increase after the launch of spot Bitcoin ETFs are optimistic, with potential significant growth expected in the coming years.