This is based on the assumption that between 10% and 20% of investors in precious metals ETFs, which have nearly $120 billion in assets, may allocate 1% of their portfolios to a bitcoin ETF
In an investor note published on Thursday, crypto company Matrixport said the approval of Blackrock’s spot bitcoin exchange-traded fund (ETF) could potentially bring between $24 billion and $50 billion of inflows into bitcoin. This is based on the assumption that between 10% and 20% of investors in precious metals exchange-traded funds, which have nearly $120 billion in assets, may allocate 1% of their portfolios to a bitcoin exchange-traded fund.
If tether’s market capitalisation increases $24 billion, acting as a proxy for potential ETF inflows, bitcoin’s price would increase to $42,000, representing a conservative estimate, the crypto firm added. With a larger influx of $50 billion (1% allocation from RIAs), bitcoin could possibly rally to $56,000.
The forecast comes after a recent fake news that the Securities and Exchange Commission had approved Blackrock’s spot bitcoin ETF application briefly sent prices up by $2,000, before dropping to $1,200 when it was revealed as fake news. Matrixport believes macroeconomic conditions this year are more favourable for crypto, forecasting in December “a substantial crypto rally” driven by lower U.S. inflation.
Matrixport’s investor note said Grayscale’s Bitcoin Trust has already considerably outpaced bitcoin itself so far this year. At the year’s outset, GBTC’s NAV discount was -45%, slightly narrowing to -43%, Matrixport added. Nevertheless, the game-changer came when Blackrock announced its ETF application on June 15, 2023, it said.
The crypto company said there are nearly 15,000 registered investment advisors in the U.S. overseeing $5 trillion in assets that could potentially recommend slight bitcoin allocations. Even a 1% bitcoin allocation would bring $50 billion into the space.
This group holds huge potential, and even a modest 1% allocation recommendation for bitcoin would usher in nearly $50 billion in inflows, Matrixport added. In July, the firm also said that bitcoin prices could reach $125,000 per unit by the end of 2024.
If history is any guide, then, there is now a 100% probability that by the end of 2024, bitcoin will experience another huge bull market with a price target of $125,000, the digital currency firm said at the time. It expects robust recoveries for both bitcoin and ethereum, forecasting that their volatility will considerably reduce. Blackrock amended its ETF filing on October 18, 2023, with the SEC.