The crypto world witnessed a historic moment yesterday with the approval of 11 Bitcoin Exchange-Traded Funds (ETFs), a development that has been eagerly anticipated since the Winklevoss twins filed for the first proposed Bitcoin ETF on July 1, 2013. This pivotal event coincides with the 15th anniversary of Hal Finney’s ‘Running Bitcoin’ tweet, marking a symbolic milestone in the digital currency’s journey.
Despite the monumental approval by the US Securities and Exchange Commission (SEC), Bitcoin’s price reaction remained muted, maintaining stability around $46,000. This suggests that the approval had already been factored into the market price. However, the landscape could change dramatically as trading in these ETFs begins today.
Spot ETFs, unlike futures ETFs, require the acquisition of physical Bitcoins by the issuers, putting direct buying pressure on the market. This aspect, combined with high conviction among long-term investors (“hodlers”) and historically low Bitcoin reserves on crypto exchanges, sets the stage for potentially volatile price movements.
Stunning Bitcoin Inflow Projections for Day 1
The forecasts for ETF inflows are staggering. Bloomberg anticipates record inflows of $4 billion on the first day of trading for spot Bitcoin ETFs, with issuers collectively contributing $312.8 million in Bitcoin seeding. BlackRock’s ETF is particularly notable, with expected inflows of $2 billion, according to Bloomberg Intelligence.
Standard Chartered recently predicted that there could be $50-100 billion in Bitcoin ETF inflows by 2024, with the potential Bitcoin price reaching $200,000 by the end of 2025. Mike Alfred, a Bitcoin expert, commented on the potential size of this inflow:
Bitwise has confirmed that they have over $100 million in investor commitments for tomorrow on Day 1. I’m sure Blackrock is hoping for $3-4 billion. Invesco/Galaxy will also come out swinging. That’s a lot of corn. I hope the exchanges are done.
Tuur Demeester of Adamant Research marked the importance of the ongoing fee war between issuers, suggesting that intense competition reflects expectations of substantial capital inflows. “The intensity of this Bitcoin ETF bidding war tells me that the issuers believe the winner’s low fees will be offset by HUGE $$ inflows,” he says. noticed.
Alistair Milne of Altana Digital echoed these sentiments, anticipating record-breaking inflows and a resulting surge in global interest in Bitcoin. “Turn in tomorrow when we’ll try to break the record for day one ETF inflows, create global FOMO and initiate the Bitcoin super cycle,” Milne wrote via X.
Meanwhile, on-chain analyst Axel Adler Jr. have done so found it a reason for Bitcoin’s underperformance thus far. He pointed out that “miners have decided to take advantage of the flow of money into the market.”
Next goal $50,000?
Raghu Yarlagadda, CEO of FalconX, in an interview with Bloomberg Technology, highlighted the crucial impact of net inflows on the price of BTC in the coming week:
What we’ve heard is that most people are pricing Bitcoin net inflows at around $1 to $2 billion in the first week. So if the net inflow is less than $1 to $2 billion, it will have a negative effect on the price, and if it is more than $1 to $2 billion, it will have a positive effect on the price.
1/ Based on customer conversations, $1 to $2 billion in spot #BitcoinETF The first week inflow is priced at $45,000 in Bitcoin. Inflows could be higher as the ETF fee wars begin this morning. 2024 is well prepared for crypto with ETF approval, BTC halving, Ethereum upgrade and… pic.twitter.com/L71Lkscfh5
— Raghu Yarlagadda (@2Ragu) January 8, 2024
British HODL, a well-known .
“For anyone wondering, the price of Bitcoin hasn’t gone up because: leverage was wiped out yesterday, everyone who wanted to get in before the ETF seems to be in. Only tomorrow at 9:30 AM can the ETFs actually start accepting capital and therefore start acquiring Bitcoin,” He declared and added that if Bloomberg is right with a $4 billion first-day income, “we could see a price of $50,000 to $57,000 by the end of trading on Friday. The buying pressure hasn’t even STARTED yet.”
At the time of writing, BTC continued its sideways trend and traded at $46,267.
Featured image created with DALL·E, chart from TradingView.com
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