Bitcoin price is expected to surge by 74.1% in the first year following the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States, as estimated by cryptocurrency investment firm Galaxy Digital. This prediction comes from a recent blog post by Charles Yu, a research associate at Galaxy Digital, published on October 24. Yu’s analysis suggests that the total addressable market size for Bitcoin ETFs in the first year after their introduction could reach a staggering $14.4 trillion.
Yu arrived at the 74.1% price increase projection by examining the potential impact of fund inflows into Bitcoin ETF products, using gold ETFs as a comparative benchmark. He anticipates that Bitcoin’s price would experience an initial 6.2% boost in the first month after the ETF’s launch, gradually stabilizing to a 3.7% monthly increase by the end of the first year. Based on this estimation, Bitcoin’s price could potentially reach $59,200, representing an impressive gain.
Markus Thielen, head of research at digital asset financial services firm Matrixport, shared a similar sentiment in an October 19 post, estimating that the approval of BlackRock’s spot Bitcoin ETF application could push Bitcoin’s price to a range of $42,000 to $56,000.
For the second and third years post-launch, Yu projects the addressable market size for U.S. Bitcoin ETFs to increase substantially, reaching $26.5 trillion and $39.6 trillion, respectively. However, Yu acknowledges that any delay or denial of spot Bitcoin ETFs could significantly impact these price projections.
Notably, Yu’s estimates are considered conservative and do not account for potential “second-order effects” resulting from the approval of spot Bitcoin ETFs. He anticipates that other global markets may follow the United States’ lead by introducing similar Bitcoin ETF offerings, thereby expanding the investment opportunities for a wider population of investors.
“In the near-term, we expect other global/international markets to follow the U.S. in approving + offering similar Bitcoin ETF offerings to a wider population of investors,” Yu noted, adding that “2024 could be a big year for Bitcoin” due to ETF inflows, the upcoming April 2024 Bitcoin halving, and the possibility that interest rates have peaked or will peak in the near term. This suggests that Bitcoin’s future remains optimistic, and the introduction of ETFs in the United States could have a substantial impact on its value and market dynamics.