Galaxy Digital has estimated that the price of Bitcoin will increase by 74.1% in the first year after spot Bitcoin exchange-traded funds (ETFs) are launched in the United States. The estimated total addressable market size for Bitcoin ETFs in the first year is $14.4 trillion. This prediction is based on the potential price impact of fund inflows to Bitcoin ETF products, with comparisons to gold ETFs. According to these estimates, Bitcoin's price would increase 6.2% in the first month after the launch of an ETF, gradually trending downward to a 3.7% monthly increase by month 12.
Galaxy Digital, a crypto investment firm, has predicted that the price of Bitcoin will increase by 74.1% in the first year following the launch of spot Bitcoin exchange-traded funds (ETFs) in the United States. According to Galaxy Digital research associate Charles Yu, the estimated total addressable market size for Bitcoin ETFs in the first year would be $14.4 trillion. This prediction is based on assessing the potential price impact of fund inflows into Bitcoin ETF products using gold ETFs as a baseline.
Yu's estimates suggest that Bitcoin's price would experience a 6.2% increase in the first month after the launch of an ETF, with a steady decrease in monthly increases, ultimately reaching 3.7% by the end of the first year. These predictions are based on the assumption that spot Bitcoin ETFs will be approved.
While there are several factors that could impact these predictions, including ETF approval delays or denials, Yu believes that these estimates are conservative and do not account for the potential "second-order effects" of a spot Bitcoin ETF's approval. He suggests that other global markets may follow the U.S. in approving and offering similar Bitcoin ETF products, expanding access to a wider population of investors.
The second year after the launch of U.S. Bitcoin ETFs is estimated to have an addressable market size of $26.5 trillion, while the third year is expected to reach $39.6 trillion. These projections indicate that 2024 could be a significant year for Bitcoin, driven by ETF inflows, the Bitcoin halving in April 2024, and the possibility that interest rates may have peaked or will peak in the near term.
(BRAYDEN LINDREA, COINTELEGRAPH, 2023)