In a recent report, cryptocurrency services provider Matrixport made a bold prediction that Bitcoin (BTC) could reach a staggering $56,000 if BlackRock’s proposed spot Bitcoin exchange-traded fund (ETF) gains approval. Even with a more conservative estimate, the report suggests that BTC could rise to $42,000.
Matrixport’s analysis is based on the assumption that a significant percentage of investors in precious metals exchange-traded funds (ETFs) will seek to diversify their portfolios by investing in a spot Bitcoin ETF. The report estimates potential inflows of $12-24 billion into the Bitcoin ETF if this scenario plays out.
Currently, the market capitalization of Grayscale Bitcoin Trust (GBTC), a well-known Bitcoin investment vehicle, stands at around $17-18 billion. However, it has previously reached a peak of $44 billion, making Matrixport’s estimate of $12-24 billion seem relatively conservative.
BlackRock submitted its application for a spot Bitcoin ETF on June 15, which led to a significant price increase in Bitcoin. In just seven days following the filing, Bitcoin’s price surged from $24,800 to over $30,000, with its recent trading price hovering around $28,500.
Matrixport also pointed out the substantial influence of the 15,000-strong U.S. registered investor advisor (RIA) community, which oversees approximately $15 trillion in assets. Even a modest 1% allocation recommendation for Bitcoin from this community could result in approximately $50 billion in inflows.
The report noted that if Tether’s market capitalization were to increase by $24 billion, acting as a proxy for potential ETF inflows, Bitcoin’s price could see a conservative estimate rise to $42,000. With a more significant influx of $50 billion, representing a 1% allocation from RIAs, Bitcoin could potentially rally to $56,000.
While the crypto community awaits the decision from the U.S. Securities and Exchange Commission (SEC) regarding various ETF applications, the SEC recently announced a delay in the review process. The regulator stated that it needed more time to consider these applications, creating anticipation and uncertainty in the market.