The recent surge in Bitcoin’s price has everyone speculating about how high it can go. And now, with the introduction of spot ETFs on the horizon, the excitement is reaching new levels. Reputable companies like BlackRock and Fidelity are getting in on the action, which could bring a wave of institutional investors into the market.
But just how high can Bitcoin rise? Well, according to CoinShares’ Chief Strategy Officer Meltem Demirors, there’s more to this story than just ETFs. Many major financial institutions in the US are actively working on providing access to BTC and have over $27 trillion in client assets waiting to jump in. That’s right folks, we’re talking trillions here!
BlackRock, being the world’s largest asset manager, has already filed for a Bitcoin ETF application. And rumors are swirling that Fidelity Investments is also considering one. Not to mention Invesco and WisdomTree – both top 10 ETFs – have already applied as well. If even a fraction of that $27 trillion were to flow into Bitcoin through these ETFs, we’d be looking at some serious price movement.
Let me break it down for you: Just 1% of that money would amount to over $270 billion (and probably more because not all applicants are included). To put things into perspective, Bitcoin’s current market cap is around $590 billion. So yeah…we’re talking big numbers here.
To get an idea of what might happen when these ETFs launch, let’s take a look at history. When gold ETFs were introduced back in November 2004, they caused quite a stir and sent prices soaring. Gold went from $400 per ounce at approval to $600 by 2006 and then skyrocketed up to $800 by 2008! It took seven years after approval for gold to hit its peak at nearly $2k (+359%). Renowned expert Will Clemente believes we could see a similar price action with Bitcoin once these ETFs hit the market.
And let’s not forget that Bitcoin is often referred to as digital gold. So, it’s worth comparing their market capitalizations. Currently, BTC stands at $590 billion while gold sits around $12 trillion. If Bitcoin were to capture just 10% of gold’s market share (around $1.2 trillion), we’d be looking at a doubling of its current price! And guess what? That’s not impossible considering Bitcoin already reached an all-time high of around $67k in 2021 when its market cap was about $1.2 trillion.
But wait, there’s more! Let me throw another comparison your way: The total global stock market has a whopping value of over $100 trillion, and Apple alone accounts for about 3% of that! In other words, Apple is five times more valuable than Bitcoin right now. So yeah…there’s still plenty of room for growth.
Now let’s talk supply side because that plays a role too. According to expert Alessandro Ottaviani, BlackRock and Fidelity would only need to move 0.3% of their managed capital into Bitcoin to buy up all existing BTC on exchanges at the current price – crazy stuff! On top of that, Glassnode research shows that there is currently a revival in US demand after a period of weakness, but the market remains highly illiquid.
In fact, there are only 2.28 million BTC left on exchanges (11.9% circulating supply) while short-term holders hold just 13.%6 and long-term holders have grabbed up 74.%5 – they’re HODLing like never before!
All signs point towards a massive bull run led by institutions getting ready to dive headfirst into the world of crypto. But hey folks, don’t get ahead yourselves because there are no guarantees in this game. The US Securities and Exchange Commission could still reject these Bitcoin spot ETFs, despite BlackRock’s impressive track record.
And let’s not forget that for the price to really feel the impact of all this institutional buying, companies like BlackRock would need to buy BTC on the spot market. However, there is a possibility they might opt for over-the-counter (OTC) purchases instead – maybe even snagging up some of those 200k+ Bitcoins seized by the US government. But hey, who knows what will happen? It’s all just speculation at this point.
So folks, buckle up because we’re in for one wild ride! At press time, Bitcoin was sitting at $30,388…but who knows where it’ll go next? Only time will tell.
