It says that if the firms that have applied to list spot Bitcoin ETFs would only commit 1% of their Assets Under Management (AUM), then approximately $155 billion would flow into the Bitcoin market.
CryptoQuant, a renowned blockchain analytics firm has shared what to expect once spot Bitcoin exchange-traded funds (ETFs) get approved. By its estimates, at least $155 billion will be added to Bitcoin’s market cap, thus making the cryptocurrency a $900 billion asset. This will, in turn, lead to the crypto market seeing a flow of at least $1 trillion, CryptoQuant surmises in its report.
Spot ETFs to Bolster Institutional Adoption
The comprehensive report by the data analytics firm details how the first wave of institutional adoption happened between 2020 to 2021. CryptoQuant recalled that this was the time when institutions began adding Bitcoin to their balance sheets. The firm then suggests that the next wave will likely happen through the approval of spot ETFs, with which financial institutions will be able to provide bitcoin access to their clients.
Presently, several major financial institutions are waiting in line to get their spot Bitcoin ETF applications approved in the United States. Although rumors of approval made the airwaves earlier this week, that later turned out to be false. However, expectations are that approvals are nearer than ever, and a first may be seen by March 2024 at the latest.
CryptoQuant’s Detailed Analysis
The data analytics firm has not just submitted some kind of guesswork to come up with its projection. It says that if the firms that have applied to list spot Bitcoin ETFs would only commit 1% of their Assets Under Management (AUM), then approximately $155 billion would flow into the Bitcoin market. Interestingly, this figure represents nearly a third of Bitcoin’s current market cap. So, if all this happens, CryptoQuant believes that even BTC prices would push up between $50,000 and $73,000.
Per CryptoQuant, Bitcoin’s market cap has always grown 3-5 times more than the realized capitalization in every bull market. This means that the market cap would increase by $3-$5 for every fresh $1 that enters into Bitcoin market, the analytics firm concludes.
As of publication, the crypto market capitalization stands at $1.13 trillion, with Bitcoin accounting for more than half of the tally. The crypto market first crossed the $1 trillion mark in January 2021.