If we get a spot Bitcoin ETF in the United States, CryptoQuant expects the total market value of Bitcoin to increase to $900 billion, and they expect the total market value of crypto to increase by $1 trillion.
The first wave of ‘institutional adoption’ took place in 2020-2021, when companies added Bitcoin to their balance sheets (think MicroStrategy and Tesla), while the next wave will likely consist of financial institutions providing access to their customers to grant Bitcoin; CryptoQuant writes this in a new report.
$155 billion in capital for Bitcoin
“We expect $155 billion of capital to flow into Bitcoin once ETFs are approved. In total, ETF applicants manage $15.6 trillion (!) in capital. If 1% of that goes to Bitcoin ETFs, that would amount to assets of about $155 billion.
To put this into context, this number represents approximately 33% of Bitcoin’s current market value,” according to CryptoQuant.
To determine how much this will change Bitcoin’s market cap, CryptoQuant examines the change in market cap resulting from increases in realized capitalization. The realized limit is the average purchase price at which all Bitcoins were purchased multiplied by the number of Bitcoins in circulation.
Data from CryptoQuant shows that Bitcoin’s market capitalization is growing three to five times faster than the realized limit. If $1 of new capital flows into Bitcoin, its market value will increase from $3 to $5.
A capital inflow of $155 billion would then result in an increase in Bitcoin’s market value by $465 billion, to $775 billion; which gives us a Bitcoin price of $50,000 to $73,000.
No new all-time highs?
This would mean that we will NOT set a new all-time high or surpass ONLY the previous record of $69,000. However, keep in mind that CryptoQuant assumes a situation where large investment funds transfer approximately 1% of their capital to Bitcoin after the Spot Bitcoin ETF is approved.
In practice, this percentage could be higher, but of course there are also other factors that determine the price of Bitcoin. The HODL army will always keep buying Bitcoin, we will see another Bitcoin halving next year, and we may get the first interest rate cuts from the US Federal Reserve.
In short, some optimistic developments are planned for next year.
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Source: BtcDirect
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Barry Siefert is an accomplished journalist and author at The Nation View. He is known for his expertise in the field of cryptocurrency, and has written extensively on the topic. With a background in finance and economics, Barry has a deep understanding of the underlying technology and market forces that drive the crypto industry.
