By
Chimamanda U. Martha
April 26th, 2024
JPM Securities emphasized that flows are most likely to increase significantly as ETF approval marks the start of a longer process of capital allocation.
In their research report on Wednesday, March 13, JMP Securities stated that the spot Bitcoin ETFs could see inflows upwards of $220 billion within the next three years by 2027. Considering the multiplier on the new capital, this could mean that the Bitcoin price could surge 4x from here to $288,000.
As we know, the total spot Bitcoin ETF inflows within just two months of their launch have surpassed $10 billion. JMP noted that the current activity and inflows are likely just the beginning, suggesting that they represent only a fraction of potential growth. They emphasized that flows are most likely to increase significantly as ETF approval marks the start of a longer process of capital allocation. JPM analysts led by Devin Ryan wrote:
“We estimate $220B of incremental flows will come into the ETFs over the next three years, which could also be quite impactful to bitcoin’s price given the multiplier on capital. If we are directionally correct on the level of net ETF inflows reaching $220B, applying our estimate of the current multiplier of new capital of ~25X, this alone could drive a $5.5T bitcoin market cap increase, or $280K per Bitcoin.”
On Tuesday, March 12, the spot Bitcoin ETFs experienced a new daily record with net inflows totaling 14,706 Bitcoin, valued at over $1 billion, as reported by BitMEX research.
According to JMP analysts, cryptocurrency exchange Coinbase Global Inc (NASDAQ: COIN) stands in a favorable position if their estimates regarding inflows are accurate. The brokerage firm has increased its price target for the COIN from $220 to $300, the highest among Wall Street analysts as per FactSet data, while retaining its market outperform rating. At the time of reporting, Coinbase shares were up 2.6% at $262.92.
BlackRock Steal the Limelight
In the last 60 days, Blackrock’s ETF #IBIT has absorbed approximately 200,000 Bitcoin, which represents around 10% of the total Bitcoin available across all exchanges. However, it will be interesting to see how many additional 60-day periods can Blackrock continue purchasing 10% of the available supply before triggering a parabolic increase in the price of Bitcoin.
Bitcoin analyst Willy Woo noted that although the ETFs are in their early stages, it might take institutions and wealth management platforms several months to conclude due diligence before commencing proper allocation.
Daily flows into #Bitcoin visualised (rolling 7d average).
Dark green patch is the influx from US Spot ETFs.
The ETFs are just getting started, institutions and wealth management platforms will take a couple of months to complete due diligence before proper allocation begins. pic.twitter.com/85d8Rep72V
— Willy Woo (@woonomic) March 14, 2024
With the Bitcoin halving scheduled for next month, analysts are predicting a mega bull ahead for Bitcoin. Crypto analyst Ali Martinez explores the historical patterns of Bitcoin halving events, focusing on the time gaps between halvings and subsequent market peaks.
Following the 2012 #Bitcoin halving, $BTC peaked in 367 days. Post-2016 halving, it soared to a market top in 526 days, and after 2020's halving, it took 547 days to top.
Though there may be slight dips along the way, historical patterns suggest we are far away from a #BTC… pic.twitter.com/EzLQIMcZZp
— Ali (@ali_charts) March 13, 2024
Martinez’s examination unveils that after the 2012 Bitcoin halving, the cryptocurrency reached its peak within 367 days. Following the 2016 halving, Bitcoin surged to a market top in 526 days. Subsequently, after the 2020 halving, it took 547 days for Bitcoin to reach its peak.
