Bitcoin ETF Could Boost Crypto Market by $1 Trillion, Analysts Say

By Mat Di Salvo

Bitcoin’s market cap will boom if spot exchange-traded funds (ETFs) get approved next year, according to a new report. 

CryptoQuant, which provides blockchain data to investors, said in a report this week that it expects Bitcoin’s market cap to reach $900 billion due to the amount of money that would flow into the market from institutions. 

Bitcoin’s market cap currently stands at $550 billion, according to CoinGecko data. 

CryptoQuant also said the flood of money into the digital asset world could bump the entire crypto market cap up by $1 trillion. 

“Indeed, the potential of fresh money entering the Bitcoin market through these spot ETFs would dwarf the amount of money that flowed into the GBTC fund, the largest Bitcoin fund in existence, in the last bull market cycle,” the report said, referring to the Grayscale Bitcoin Trust.

Grayscale’s Trust differs from an ETF in that its shares are not currently registered with the SEC as securities, and they were initially only available to accredited investors and subject to a six-month holding period. Grayscale’s shares are also not redeemable. 

The company has sought to convert GBTC into a spot market Bitcoin ETF but has been denied by the SEC. Grayscale then sued the SEC in June for denying its application. In August, a judge ordered that the SEC’s denial of Grayscale’s spot Bitcoin ETF application be reviewed, essentially siding with the firm. 

Market analysts now expect the SEC to go ahead and approve Grayscale’s application—and the many others pending review.

A long-list of major Wall Street players have applied to the U.S. Securities and Exchange Commission for a spot Bitcoin ETF. Big investors are so keen for such a product that the world’s biggest asset manager, BlackRock, has even applied for one. 

Spot crypto ETFs allow investors to get exposure to digital assets without having to buy and hold them; the financial vehicles are publicly traded and track the performance of an underlying asset or index. 

But the SEC has been slow to approve one, with the regulator’s chair Gary Gensler, as well as his predecessors, mostly citing market manipulation as the main reason not to give such a product the green light. 

Now, though, experts have said it’s only a matter of time before Wall Street does get one. Along with BlackRock, Valkyrie Investments, Ark Invest, and VanEck are all trying to get a Bitcoin ETF approved. Analysts at Bloomberg Intelligence now say there is a 90% chance the U.S. market will have a Bitcoin ETF by January 10. 

Edited by Guillermo Jimenez

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