In a recent report Launched by Matrixport, a digital asset financial services platform, the spotlight shifts beyond bitcoin (btc) as the long-awaited approval of a bitcoin Spot Exchange Traded Fund (ETF) from the United States Securities and Exchange Commission (SEC) could have far-reaching effects.
According to the analysis, the bitcoin market could not only see a significant boost, but Tie (USDT) and the broader crypto market could also see positive results.
Potential impact on bitcoin
Matrixport’s forecast, outlined in its 2023 outlook report published on December 9, 2022, projected a substantial crypto rally driven by factors such as lower inflation in the United States and favorable macroeconomic conditions.
This projection anticipated strong rebounds for bitcoin and ethereum (eth), along with a notable decrease in volatility.
Regarding the approval of these pending applications, a prominent player in the market has been Grayscale Investments’ bitcoin Trust (GBTC), whose share prices are up an impressive 167% so far this year, outpacing bitcoin‘s 71% growth.
While GBTC’s NAV discount narrowed marginally from -45% to -43% at the start of the year, the turning point came when BlackRock announced its ETF application on June 15, 2023.
Matrixport’s previous reports analyzed the US Registered Investor Advisor (RIA) community, comprised of approximately 15,000 advisors overseeing around $5 trillion.
Recognizing the potential of this group, the report suggests that even a modest 1% allocation recommendation for bitcoin would result in approximately $50 billion in tickets.
btc price projection of $56,000
Drawing a parallel with precious metals ETFs with an estimated market cap of $120 billion, and assuming 10% to 20% of precious metals ETF investors explore a bitcoin ETF as a diversification tactic against currency debasement and hedges against inflation, potential inflows into the bitcoin ETF could reach a significant $120 billion. 24 billion.
The report speculates on the implications for Tether’s market capitalization by looking at the potential impact of the approval of BlackRock’s bitcoin ETF.
Acting as an indicator of potential ETF inflows, a $24 billion increase in Tether’s market cap could conservatively push bitcoin‘s price to $42,000. With an even larger influx of $50 billion resulting from a 1% allocation by RIAs, bitcoin could rise to $56,000.
Overall, Matrixport’s analysis sheds light on the potential ripple effects of the bitcoin ETF approval, extending beyond the immediate bitcoin market and encompassing Tether and the broader cryptocurrency landscape.
As market participants anxiously await regulatory decisions, the industry remains poised for potential growth and transformation.
At the time of writing, the market-leading cryptocurrency bitcoin (btc) is trading at $28,700, reflecting an increase of 1.8% in the last 24 hours.
It is worth noting that btc has successfully maintained the gains made since mid-September. During this period, the cryptocurrency broke its short-term downtrend structure after hitting its year-high at $31,800 on July 13.
Featured image from Shutterstock, chart from TradingView.com