- Bitwise CEO foresees massive capital inflow post Bitcoin spot ETF approval.
- His estimates pegs the expected inflow at $50 billion.
Speaking in an interview on the Unchained Podcast, Matt Hougan, the Chief Executive Officer (CEO) of Bitwise, one of the candidates for a potential spot Bitcoin (BTC) spot Exchange Traded Fund (ETF) approval, speculates that the launch of the offering will drag an influx of up to $50 billion into the crypto ecosystem. He foresees this huge figure flowing into the market within five years of the ETF product launch.
Hougan also mentioned that his prediction is not a guarantee as the market could still go sideways but at the same time, he believes that it is a reasonable estimate. The CEO of the crypto fund manager tried to give context to his prediction by explaining that Bitcoin ETFs are accorded 1% of the market in other regions when they are matured. Bringing it down to the United States which currently has an ETF market estimated to be worth $7 trillion, 1% of this value would be $70 billion.
With $20 billion already in Grayscale Bitcoin Trust (GBTC), this leaves $50 billion. Also, Hougan acknowledged the possibility of having more than $50 billion enter the crypto market.
It’s net new demand at a time of decreasing supply because of the halving and that’s a pretty exciting combination.
The Bitwise executive recounted a prediction by Cathie Wood’s ARK Invest who placed a 15x multiplier on the expected influx following a spot BTC ETF approval from the Securities and Exchange Commission (SEC). Hougan disagrees with the lofty prediction citing that there is no good view on the impact of new demand on a completely supply-inelastic commodity.
Predictions Post-spot Bitcoin ETF Approval
Aside from ARK Invest and Bitwise CEO’s prediction, there have been a couple of other experts who are bullish on the potential that could accompany a spot Bitcoin ETF.
The CEO and Chief Investment Officer of Morgan Creek Capital Management, Mark Yusko foresees the Bitcoin ETF approval driving up to $300 billion into the crypto market. To further buttress his claim, he highlighted that many other investment giants are only waiting for regulatory clarity before they plunge into the crypto market.
He noted that the coming of a spot BTC ETF would be the secured and regulated exposure to the market that investors need to enter into the sector. Yusko is also confident that the price of Bitcoin could hit $40,000 after the influx. At this time, BTC is only trading at $34,139.11, down by 1.82% within the past 24 hours.
Similarly, data analytics behemoth, CryptoQuant, sees the possibility of a spot Bitcoin ETF approval thrusting the overall cryptocurrency market value by an additional $1 trillion. This was after an initial prediction of an influx of $150 billion.
Considering the Asset Under Management (AUM) and reputation of the investment management firms involved in the race for spot BTC ETF including BlackRock, Fidelity, ARK Invest, and others, these predictions are very likely.
