Launching a spot Bitcoin ETF could generate $30b worth of BTC inflows
Launching a spot Bitcoin ETF could generate $30b worth of BTC inflows
Last month, BlackRock's filing with the SEC for a spot Bitcoin ETF led to increased investor attention on Bitcoin, pushing its value up to $30,000.
The launch of a Bitcoin ETF could change the playing field for crypto investors. These are the conclusions reached by NYDIG analysts.
Spot ETFs based on Bitcoin already exist in other countries, and the U.S. is considering their introduction. NYDIG estimates that a total of $28.8 billion has already been invested in Bitcoin products worldwide, of which $27.6 billion has been allocated to spot products.
NYDIG experts explained the benefits of launching a spot Bitcoin ETF. It will offset some of the current difficulties of investing in Bitcoin. In addition, Bitcoin ETFs have better protection for investors, which is guaranteed by giants such as BlackRock and iShares.
The current difficulties are the need to buy and sell Bitcoin through brokers, report positions, and pay taxes. Other options seem preferable. Private funds, trusts, and spot ETFs will be able to provide more liquidity with fewer tracking errors and lower costs.
In its report, NYDIG compares Bitcoin to gold. Global gold ETFs have attracted more than $210 billion in AUM, with North American investors contributing 107.3 billion, which is more than half of that.
With the exception of El Salvador, Bitcoin is not stored in banks. On the contrary, the majority of Bitcoins (4.9%) are held in various funds. NYDIG also states that with the advent of the Bitcoin ETF, we should expect an inflow of another $30 billion.
"The numbers are striking on an absolute dollar basis: over $210 billion is invested in gold funds, while only $28.8 billion is invested in Bitcoin funds. Bitcoin is about 3.6x more volatile than gold, meaning that on a volatility equivalent basis, investors would require 3.6x less bitcoin than gold on a dollar basis to get as much risk exposure. Still, that would result in nearly $30 billion of incremental demand for a Bitcoin ETF," stated the NYDIG's report.
It's worth noting that not everyone shares this opinion, with JPMorgan believing that a spot Bitcoin ETF will not have much of an impact on the market at all, as spot Bitcoin ETFs have not caused such overwhelming success in other countries.
Earlier, we wrote that ASIC had revoked the license of the Australian branch of FTX.
