According to a recent blog post by crypto investment firm Galaxy Digital, the price of Bitcoin (BTC) could increase by 74.1% in the first year after the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States. The research associate at Galaxy Digital, Charles Yu, estimated that the total addressable market for Bitcoin ETFs would be $14.4 trillion in the first year after their launch. Yu arrived at the 74% figure by analyzing the potential price impact of fund inflows to Bitcoin ETFs, using gold ETFs as a baseline.
Yu further projected that the price of Bitcoin would initially increase by 6.2% in the first month following the launch of an ETF, before gradually declining to a monthly increase of 3.7% by the end of the twelfth month. These estimates were based on Bitcoin price data from September 30th. If the price were to increase by 74.1% according to these projections, Bitcoin’s value would reach $59,200.
Another expert in the field, Markus Thielen, the head of research at Matrixport, a digital asset financial services firm, also arrived at a similar estimate. In an October 19th post, he predicted that Bitcoin could rise to a range of $42,000 to $56,000 if BlackRock’s spot Bitcoin ETF application is approved.
Looking beyond the first year, Yu predicts that the addressable market size for Bitcoin ETFs in the US could reach $26.5 trillion in the second year after their launch and $39.6 trillion by the third year.
Yu did acknowledge that any delay or denial of spot Bitcoin ETFs would impact the potential price increase. However, he believes that his estimates are still conservative and do not consider the “second-order effects” that could arise from the approval of a spot Bitcoin ETF. He anticipates that other global markets will follow the US in approving and offering similar Bitcoin ETFs to a wider population of investors in the near future.
Yu also highlighted the year 2024 as a significant one for Bitcoin, citing factors such as ETF inflows, the April 2024 Bitcoin halving, and the possibility that interest rates may have peaked or will peak in the near term.
Overall, Galaxy Digital’s estimates suggest that the introduction of spot Bitcoin ETFs in the US could have a significant impact on Bitcoin’s price, leading to a substantial increase in its value in the first year after their launch. While these forecasts are based on certain assumptions, they highlight the potential growth and increasing mainstream adoption of Bitcoin through the introduction of regulated investment products like ETFs.