That is neat…however all this nonetheless appears like an overreach – why all of the maddened pleasure over inventory listings?
You recognize that zen/blacked out state that Will Ferrel’s character enters throughout the debate scene of Previous Faculty?
Brace yourselves. We’re about to go to the same place…
*Inhale*
Having a spot Bitcoin ETF stay on US inventory exchanges means a complete new sort of cash can now enter the crypto house (by proxy of the inventory market).
Massive cash. Like, silly huge cash (suppose: funds that collectively handle tens of trillions of {dollars}).
There’s that…plus:
Loads of these asset managers are on the lookout for locations to ‘park’ their shopper’s cash, for years at a time.
Which means giant chunks of Bitcoin’s provide can be consumed and never made out there once more for a sizzling minute.
And positive, there is a whole provide of 21 million Bitcoin, 19M of which has already been launched and presently hovers round $1 TRILLION of whole market worth…
Which implies the $50B to $100B of estimated funding that these ETFs will see in 2024 will not reeeeally do a lot to maneuver the value…proper?
What can a purchase order of 5-10% of the overall provide, sensibly do over a 12 months?
Let’s dig in to some numbers…
Positive, Bitcoin has a tough cap of 21M cash – but it surely’s estimated that 6M+ of them have been misplaced through the years, which implies we’re coping with a complete provide nearer to 15M.
Which is an element…
However it nonetheless does not put sufficient of a dent within the provide to warrant the wild predictions of a $100k-$200k (ETF assisted) BTC value within the subsequent 12-18 months.
What brings these predictions right into a bit extra of a possible actuality is that this:
As of this writing, there’s roughly 1.88 million Bitcoin that can be purchased on crypto exchanges around the globe (or $87.38B value).
Or one other strategy to put it’s:
Whereas the overall provide of Bitcoin is value near $1 trillion ($905B to be precise), the present recognized purchasable provide is barely $87.38B.
Which opens to the opportunity of this estimated $50B to $100B of ETF funding, to set off the next situation (or one thing prefer it):
ETFs purchase up most/all of the out there BTC → Bitcoin turns into near-impossible to buy for a time frame…
Costs go method as much as meet demand → which entices holders to promote…
Bitcoin is that can be purchased once more, however nonetheless in restricted portions and at a a lot greater value.
And to high all of it off…
These ETFs are coming at a cut-off date which will effectively create the ‘good storm’ of lowered provide and elevated in demand.
Provide discount:
In April 2024, the brand new Bitcoin being created/put onto the market every day can be reduce in half, from 6.25 BTC launched each 10 minutes, to three.12 BTC.
Elevated demand:
The Federal Reserve has introduced its plans to chop rates of interest a number of occasions in 2024.
Price cuts = cheaper loans/strains of credit score = simpler entry to capital for buyers and extra disposable revenue for on daily basis of us = extra money flowing via the economic system…
A few of which is able to find yourself in Bitcoin and Bitcoin ETFs, rising total demand.
*Exhale*
