News - This is how bullish the Bitcoin Spot ETF is

By Mike Hesp

This is how bullish the Bitcoin Spot ETF is

Bitcoin (BTC)

The adoption of the Spot ETF will have a significant price effect. At least that's what analysis firm CryptoQuant says.

Will the Spot ETF push Bitcoin market capitalization to a trillion US dollars? This question is addressed in a new research report from On-Chain analytics service CryptoQuant.

As the authors write, the Bitcoin Spot ETF will inject approximately $150 billion (USD) into the BTC market. This is an increase in the Realized Market Cap of $150 billion. This represents an estimated increase in market capitalization between $450 billion and $900 billion. Thus, a market capitalization of a trillion dollars is realistic.

The Realized Market Cap measures the actual capital in U.S. dollars that has flowed into Bitcoin to date. In contrast, Market Cap is calculated as the product of the amount of BTC circulating and the price.

The expected capital inflow of $150 billion is certainly not an arbitrary calculation. In total, all capital companies seeking adoption of a Bitcoin Spot ETF $15.6 trillion. BlackRock and Fidelity alone have about $14 trillion.

Bitcoin ETF: CryptoQuant is conservative

If sponsors put just one percent of their capital into BTC, this results in an inflow of $155 billion. At the time of writing, that represents about one-third of the current Bitcoin market capitalization.

That the approval of a Spot ETF actually has real economic consequences was demonstrated by the fake alert last Monday, Oct. 16. Cointelegraph had reported that the iShares Bitcoin Trust had been approved - a false report, as it later turned out. Yet within minutes, the price rose by double digits.

Extra bullish: Even the world's largest Bitcoin fund to date, the Grayscale GBTC Trust, only provided $5.5 billion of inflows into the BTC market in the previous bull market. Yet Bitcoin soared to $69,000 at its peak.

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