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How much will Spot Bitcoin ETF approval add to the crypto market cap? $1 trillion, perhaps?

TL;DR

  • After the false rumors that had Bitcoin reach $30k in a few minutes, crypto market analysts point out that investors should not underestimate the value of BTC ETFs to the DeFi industry.
  • CryptoQuant points to an additional $155B to the overall crypto market cap that could grow over $900 billion, peaking at $1 trillion.
  • Also, the BTC ETF approval could get BTC to overlap its all-time high price, reaching $73,000. 

According to CryptoQuant,  an additional $155 billion is to be added to the crypto’s market cap if the Bitcoin ETFs are approved by the United States Securities Exchange Commission. Additionally,  the crypto market could grow over $900 billion, peaking at $1 trillion in the long run, if the approval goes through.  

The crypto market has long awaited Bitcoin’s Exchange-Traded Funds (ETFs) approval, which could revolutionize the entire digital world. This would provide institutional investors, together with retail traders, a regulated and easily accessible infrastructure to invest in Bitcoin. Such events could have a positive impact on all crypto investors. 

Bitcoin ETF potential approval

Future-based ETFs track Bitcoin’s price through derivatives contracts. On the other hand, spot Bitcoin ETF directly holds the underlying digital currency, and this distinction is essential to investors. It provides direct exposure to BTC price movement and, as such, gives real-time analysis of the market movements. It eliminates the complexities associated with futures contracts.  

CryptoQuant, the popular data-driven crypto analysis firm, has commented on the impact spot Bitcoin ETF would bring to the digital realm. It could attract a wave of new investors who have been in line waiting for approval but hesitated due to regulatory uncertainty. 

The report argues that the potential gain from the approval could be greater than the Grayscale Bitcoin Trust (GBTC) funds recorded in the last bull run. Keeping in mind that the GBTC crypto fund is the largest in the world, with $16.7 billion, the potential gains could be massively understated. 

Additionally, CryptoQuant says that if the issuers apply to list ETFs and put 1% in the Assets Under Management (AUM), approximately $155 billion could flow into the market. If the approval takes place, the BTC price could overlap its all-time high, reaching $73,000. 

Even according to Bitcoin’s data history, recent bull runs have grown its capitalization by 3 to 5 times. In simpler terms, if $1 enters the Bitcoin market, its capitalization would be increased by $3 to $5. Consider the recent scenario when the fake post about the SEC’s approval of the BlackRock spot Bitcoin ETF brought a huge price movement that recorded an increase of its price close to the $30,000 mark. 

At the time of the writing, BTC price stands at $26,732.79 per (BTC / USD) with a current market cap of $ 521.60B. The coins’ 24-hour trading volume is at $12.10B with a circulating supply of 19.51M. 

According to CoinGecko, the global crypto market cap today stands at $1.13 Trillion, with a -0.3% change in the last 24 hours. Total crypto trading volume in the last day is at $39.2 Billion. BTC dominance is at 49.2%, and Ethereum dominance is at 16.8%. 

Sentiments on the awaited Bitcoin ETF approval

According to the head of research and strategy at Matrixport via Telegram broadcast, Nobody will dare to short BTC now for the foreseeable future. Even if this Cointelegraph news was false, BTC can still grind higher in anticipation of the approval.”

An actual approval could raise the price through the roof and better solidify its position as the top crypto in the market. The mere prospect of the approval of the spot Bitcoin ETF has already been awaited and fueled by positive market sentiments. 

This has also assisted in boosting investor confidence in the digital asset. It has also created a sense of legitimacy for digital assets. Such an approval could propel the entire digital space. 

The potential inflow from the spot ETF could bring about a substantial capital influx. Institutional investors, including asset managers and hedge funds, have continuously shown their concern for digital currencies. Due to the strict compliance requirements and regulatory challenges, the spot Bitcoin ETF would be a useful tool in providing a more familiar framework that gains exposure to the crypto market. 

Should Bitcoin’s market cap greatly increase, other cryptocurrencies could also face an increase in value. The digital currency market is majorly driven by retail investors and a number of institutional players. The introduction of the spot Bitcoin exchange-traded funds could open a floodgate of more institutional capital. In turn, this would largely increase Bitcoin’s liquidity and drive its price upwards. 

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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