The firm believes the approval of a spot Bitcoin ETF in the United States will trigger an influx of over $30 billion in subsequent months.
The mainstream adoption of Bitcoin (BTC) by institutional investors has put the gold market on notice with a possible decoupling in the coming few years. According to a report by Matrixport, Bitcoin is about to challenge gold as a store of value due to the simple fact that the former has outperformed the latter in the past years. Additionally, the demand for Bitcoin has significantly increased in the past year despite the FTX and Alameda Research collapse that wiped out more than $30 billion from the nascent industry.
Notably, more than 10 fund managers with a combined market capitalization of more than $17 trillion have applied with the United States Securities and Exchange Commission (SEC) to offer spot Bitcoin Exchange-Traded Funds (ETF). Interestingly, the SEC lost a case against Grayscale Investments for lacking sufficient evidence on why the former could not convert its GBTC product to spot Bitcoin ETF. As a result, experts believe the chances of a spot Bitcoin ETF approval in the coming six months have exponentially increased.
Matrixport on Why Bitcoin Is Better than Gold
According to Matrixport, an all-in-one crypto financial services platform, Bitcoin has a better shot at becoming the global store of value than gold in the coming years. Moreover, Bitcoin is a better cross-border asset compared to gold, which requires a lot of regulation requirements to facilitate similar services. Additionally, Bitcoin is more versatile and offers cheaper but high-quality services to all users without discrimination.
“Even today, storing assets in the form of gold has not only become unfashionable in the digital age but comes with significant restrictions when crossing borders,” wrote Markus Thielen, head of research at Matrixport, adding that “Bitcoin offers a solution to this dilemma, enabling the swift and relatively inconspicuous movement of value across borders.”
The adoption of Bitcoin to mainstream users has come under scrutiny by global regulators amid claims that the digital asset is being used by different countries to navigate global sanctions. The ongoing war between Russia and Ukraine and recently between Israel and Gaza, has significantly affected the global supply of oil and gas products.
The fact that Bitcoin has a higher volatility due to the high speculation from global investors, Matrixport expects its market capitalization to rally beyond that of gold, which has an uncapped supply.
“Therefore, considering the current state of technological developments, bitcoin’s primary roles are likely as a store of value akin to gold and a speculative financial asset,” the report added.
Market Outlook and Price Action
The Bitcoin (BTC) market value has hovered between $500 billion and $600 billion in the past few months, but experts at Matrixport believe more than $30 billion could flow into the Bitcoin market after a spot ETF approval. Currently, the Bitcoin price action is awaiting the halving event early next year to trigger the larger crypto bull run.