The approval of the Bitcoin Exchange Traded Fund (ETF) is predicted to move the crypto market capitalization to reach IDR 15,850 trillion. CryptoQuant noted that Bitcoin (BTC) market capitalization will also increase to IDR 14,252 trillion. This prediction is based on the belief that a Bitcoin spot ETF will bring additional value of up to USD 1 trillion or around IDR 15,850 trillion to the market capitalization of crypto assets, while the market capitalization of Bitcoin (BTC) itself will reach USD 900 billion or around IDR 14,252 trillion.
Data from CoinGecko shows that Bitcoin's market capitalization has now reached USD 551 billion or around IDR 8,726 trillion.
According to the CryptoQuant report, the first institutional investor adoption process in 2020-2021 involved many institutions including Bitcoin into their financial portfolios. Furthermore, the next step is expected to involve financial institutions providing access to Bitcoin via spot ETFs.
CryptoQuant explains that if companies applying to list a Bitcoin ETF place around 1% of their Assets Under Management (AUM) in this ETF, around USD 155 billion or around IDR 2,454 trillion could flow into the Bitcoin market. This could represent around a third of the crypto asset's current market capitalization. In this scenario, the price of Bitcoin is expected to increase to a range between USD 50,000 to USD 73,000. During previous bull market periods, Bitcoin's market capitalization grew approximately 3 to 5 times greater than its actual capitalization, indicating that each new dollar entering the Bitcoin market could increase the market capitalization by 3 to 5 dollars.
The report also notes that the flow of funds into the Bitcoin market via spot ETFs will likely exceed the amount of funds coming into the Grayscale Bitcoin Trust (GBTC) in the last bull cycle. GBTC differs from ETFs in that its shares have not been registered as securities by the SEC and were initially only available to accredited investors.
Several large financial institutions in the US, such as BlackRock, have applied to launch spot Bitcoin ETFs, and approval is expected by March 2024.
Currently, many market analysts hope that the SEC will go ahead and approve applications like Grayscale and many other applications that are still in the review process.
Spot crypto ETFs allow investors to gain exposure to digital assets without needing to purchase and store them. These crypto assets will be publicly traded and follow the performance of the asset or index on which the asset is based.
Recently, Bitcoin experienced a significant price increase to reach USD30,000 after false reports circulated regarding the approval of a spot Bitcoin ETF by BlackRock. Some observers believe that this upward price trend could last for quite a long time and reduce downward pressure on prices.
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