Spot Bitcoin ETF Price Predictions! How High Will BTC Go?!

How high could btc's price go when the Spot ETFs are approved this is what Everyone's been wondering and Speculation about the answer is what's Been driving the crypto Market over the Last few months well it seems we may Finally have an answer glass node Recently published a report which Estimated that BTC could see as much as 70 billion dollar of buying pressure When a spot Bitcoin ETF is finally Approved so today we're going to tell You what the report said and what it Could mean for the crypto Market the report will be summarizing Today is titled quote Finance bridge Spotlight on spot Bitcoin ETFs and their Impact as I mentioned in the Introduction it was published by onchain Analytics platform glass node last week And we'll leave a link to the report in The description if you're Interested now the report begins with a Brief overview of what's been going on In the crypto Market the authors note That btc's price increased by a whopping 28% in October bringing its year-to-date Gains to over 100% or 2x news flash this Makes BTC one of the best performing Assets of the Year you'll remember that This impressive October rally was driven Almost exclusively by speculation about A spot Bitcoin ETF approval something That the authors underscore in the

Report they also highlight the fact that There's been heightened institutional Interest in BTC as per trading volume on The CME for context the Chicago mertile Exchange or CME is a tradire exchange That offers BTC and eth Futures Naturally most of its trading volume Comes from large institutional and high Net worth investors as such high BTC Trading volume on the CME suggests they Are interested in BTC however it's Important to note that the CME trades Paper instruments Futures contracts Meaning that no actual BTC changes hands This means that CME trading has no Direct impact on btc's spot price even So it does give you a sense of just how Much investment could come into a spot Bitcoin ETF once it's approved anyways The authors took a second to also touch On eth which only pumped by around 9% in October and soul which pumped by Whopping 80% in October the authors take This as a sign that the broader crypto Market is in recovery in other words We're nearing the end of the crypto be Market that said the focus is still very Much on BTC and the authors admit that Updates about the spot Bitcoin ETF Filing are what have been driving the Crypto Market as a fun fact trading Bots Are now tracking the tweets of Bloomberg's ETF analysts on Twitter and They've been pumping BTC whenever the

ETF is mentioned and speaking of Bloomberg's ETF analysts the authors Note that these analysts notably Eric Balunas and James saart believe there is A 90% chance that a spot Bitcoin ETF Will be approved by January some would Say that this now consensus view could Set the stage for a huge upset but Well let's not go there anywh who the Authors also recount how the SEC failed To appeal the Court's decision in Grayscales lawsuit against the regulator Over gbtc for reference grayscale sued The SEC after it rejected its Application to convert its grayscale Bitcoin trust or gbtc into a spot Bitcoin ETF and gray scale actually won The authors note the absence of an Appeal from the SEC as being a watershed Moment it basically sends a signal that The regulator is open to approving a Spot Bitcoin ETF now in case you haven't Heard the next window in which the SEC Could approve a spot Bitcoin ETF begins On the first of January 2024 and by the Way if you're enjoying the video so far Be sure to smash that like button to Help others find it but back to that Institutional interest in BTC now to put Things into perspective the CME recently Became the largest Futures exchange for BTC by trading volume this is Significant because it's the first time That it's happened it's also the first

Time that a trafi exchange has flipped a Crypto exchange namely binance and it's Not just Futures either the authors note That the open interest in Bitcoin call Options surged to almost 10 billion the Highest since the crypto bull market for Those unfamiliar options give you the Option to buy an asset at a specific Price at some predetermined point in Time as you might have guessed Traders Will buy call options when they believe That the price of an asset will be Higher at that future date in this case BTC the authors note that this is Evidence of the crypto Market becoming More mature but there are two important Caveats here the first is that most of BTC options trading takes place on Deribit not the CME given that deribit Is a crypto exchange it's harder to say Whether this is evidence of trfi Institutional interest in case you're Wondering the open interest on deribit Is currently 15 times higher than it is On the CME for options and this ties Into the second caveat and that's that The open interest for BTC has increased Since October it currently stands at Almost 20 billion as you can see this is The highest level of of open interest on Record I should note that call option Interest is closer to 13 billion so 30% Up compared to the glass Noe stat in any Case the authors contrast this explosion

In derivatives trading to the percentage Of BTC that's being huddled in October a Staggering 76% of btc's Supply was being Huddled another record high in Practical Terms this means that btc's price is Likely to be much more volatile in the Coming weeks if you're wondering why That's because the less BTC there is on Exchanges the less Market depth there is And the less Market depth there is the Easier it is to push btc's price up or Down some have argued that the high Percentage of BTC being hled could be a Barrier to an ETF approval for this Reason regardless the authors take this Hodle statistic as evidence that most BTC holders believe that its price will Continue to go up in the medium to long Term that's because these hodlers are in Profit and yet they refuse to take Profits the only reason they wouldn't is If they thought prices would go higher And if you happen to be interested in Trading this upward volatility or Huddling through it then check out the Coin Bureau deals page it's got trading Fee discounts of up to 60% and bonuses Of up to $40,000 on the best crypto Exchanges as well as the biggest Discount on the best hardware wallets The link will be down in the description Now in the second part of the report the Authors discuss btc's correlation to Other assets and the quote flight to

Quality narrative if you read the crypto News you'll know that the latter is a Reference to a comment made by Black Rock CEO Larry thinkink who said btc's Rally is evidence of a flight to Quality The authors explained that there's data To back this up and point to btc's Relatively strong correlation to gold as Proof they also point to the fact that Btc's correlation with the stock market Has been declining something that can be A blessing or a curse depending on how The two markets are moving if you Watched our recent video about how to Trade crypto you'll know that the low Correlation between BTC and stocks is Evidence that trafi investors are not Directly involved in the crypto Market If they were then the correlation would Be stronger because they see BTC as Being analogous to a tech stock on that Note the fact that trafi investors have Been getting lots of indirect exposure To the crypto Market suggests that They're still a bit nervous about Investing into it directly likely due to Regulatory uncertainty and limitations This Dynamic will change once a spot Bitcoin ETF is approved and this relates To the third part of the report which is About how btc's price would be affected By a spot Bitcoin ETF approval in case It wasn't clear enough the reason why a Spot Bitcoin ETF is so significant is

Because it will offer direct exposure to The underlying asset put differently a Spot Bitcoin ETF will have a direct Impact on btc's price because the Manager of the ETF will have to buy and Sell physical BTC on behalf of ETF Holders more importantly an ETF will be Accessible to investors who can't invest Directly into crypto for regulatory Reasons the authors note that this could Quote dramatically shift the market Dynamics for BTC as it could result in Most BTC trading shifting from crypto Exchanges to ETFs however the authors Also note that this assumes that the Spot Bitcoin ETF will see the inflows That everyone assumes will come as we've Seen with the recent approval of the Ethereum Futures ETF the approval of an ETF does not guarantee inflows the Authors asked whether we could see the Same Phenomenon with the spot Bitcoin ETF applications they also question how Much BTC there is left in circulation For these ETFs to answer these questions the Authors examined what happened to gold's Price after a gold ETF was approved back In 2003 with BlackRock also being the Asset manager in question they also used Onchain analysis to estimate how much of Btc's Supply is truly IL liquid meaning It's very unlikely it will be tradable Now regarding the spot gold ETF the

Authors note that gold's price more than Quadrupled in the decade after the ETF Was approved for any stats nerds out There that translates to an annualized Return of roughly 15% given this fact The authors predict that BTC will see a Similar parabolic price increase to Their credit the authors give an Important caveat and that's that the Macroeconomic conditions of the time Such as a weak US dollar helped gold Rally as much as it did be that as it May however they also argue that the Sudden accessibility of gold via the ETF Was nonetheless the most important Factor at play but again accessibility Does not guarantee investment and this Is where more credit is due to the Authors they unpack the possibility that The demand for BTC may not be as high as It seems they point to micro strategy Stock and gbtc as potential evidence With both seeing small inflows relative To other assets suggesting that Institutional investors aren't that Interested in BTC of course they argue Against this by pointing out that micro Strategy stock and gbtc are not ideal Proxies for BTC from an Institutional Perspective neither of the two tracks Btc's price perfectly the former because It's a business and the latter because Of issuance and Redemption limitations Surprisingly the authors refer to those

Who would say that the conversion of Gbtc to a spot Bitcoin ETF would result In sell pressure as critics to bring you Up to speed it's believed that investors Who bought gbtc at a discount relative To its BTC backing will sell once the Conversion happens for an instant profit This is something that was recently Pointed out by JP Morgan the mega Bank Estimates that the gbtc converted ETF Could experience up to 2.7 billion of Sell pressure if you don't understand Why you can check out our video about That using the link in the description Now whether the sell pressure from gbtc Shareholders will affect btc's price Ultimately depends on the potential Buying pressure this is exactly what the Authors cover next they start by Assuming that BTC is seen as a safe Haven asset specifically a safe haven Asset that's preferable to stocks and Bonds they then assume that up to 10% of The assets under management of the Spy ETF which tracks the S&P 500 the Vanguard Total Stock Market ETF and the Vanguard Total Bond Market ETFs would Move into BTC in addition they assume That 5% of Gold's market cap will also Move into BTC both pretty bold Assumptions based on these bold Assumptions the authors estimate that BTC could see up to 70 billion dollars Of inflows with around 60 billion coming

From those ETFs and around 10 billion Coming from Gold's market cap now it's Hard to know how much this could pump Btc's price but it would likely be in The double digits funnily enough the Authors admit that this estimate is a Bit ambitious but they contrast it to The total market cap of ET TF products In the United States which currently Stands at $7 Trillion $70 billion of inflows would Amount to a 1% switch from these ETFs Into a spot Bitcoin ETF which they argue Is realistic moreover they reveal that Their estimate is almost the same as the One recently given by Galaxy digital the Difference is that Galaxy digital's Estimates for spot Bitcoin ETF inflows Take place over the course of 3 years With the first year seeing $4 billion of Inflows the second seeing $27 billion And the third $39 billion Galaxy digital Also went as far as estimating the Potential impact on btc's price they Estimate a 6.2% gain in the first month And a 74% gain by the end of the first Year if we use glass node's gold ETF Framework however BTC could crash for The first few months the same way gold Did after its ETF Shout out to James Stratton at Crypt Slate for that fascinating fact but That's just the demand side of the Equation you recall that the supply side

Of the equation requires looking at some Onchain data glass node speciality here The reports authors start with an Indicator called the short-term holder Supply they explain that this indicator Tracks BTC that's moved in the last 155 days the authors then assume that The short-term holder Supply is the Supply of BTC that could flow into a Spot Bitcoin ETF the weak hands if you Will in all seriousness the authors note That the short-term holder supply of BTC Is at multi-year lows which isn't Surprising given what they noted about Hodling to get a sense of how much of This BTC could find its way into an ETF The authors further divide the Short-term holder Supply into three Buckets IL liquid Supply BTC in wallets With few transactions liquid Supply BTC In wallets with some transactions and Highly liquid Supply BTC in wallets with Lots of transactions even then the trend Is clear the illiquid supply of BTC is Going up while the liquid and highly Liquid supply of BTC is going down this Suggests that there won't be much BTC Available for these ETFs but the authors Have one more indicator up there sleeve The realized cap of Bitcoin now the Realized cap of Bitcoin essentially Shows you how sensitive btc's price is To inflows and outflows as you can Hopefully see the realized cap of

Bitcoin is currently low if we Understand correctly a $1 inflow into BTC would correspond to a $3 increase in Market cap for large Investments Obviously what this means is that if the Spot Bitcoin ETFs see 70 bill billion Doar of inflows like the authors predict Then btc's market cap would increase by $210 billion this would translate into a BTC price of around 50k which actually Isn't that far off from btc's current Price levels at the time of shooting now Believe it or not but the authors advise Any institutional investors reading to Invest in BTC when its price is this Sensitive to inflows as they'll get more Bang for their Buck conversely they Advise these investors to stay away from BTC when its price is less sensitive to Inflows as the returns may not be as big So this brings us to the big question And that's what all this means for BTC And the crypto Market by now you'll know The short answer btc's price will pump When a spot Bitcoin ETF is approved the Only question is how much bu and glass No's report seems to have given us a Range of what to expect as I just Mentioned a few moments ago the $70 Billion of inflows the authors predict Could pump BTC up to around 50k this would translate to a rally of 20 to 25% assuming all those inflows Come at once as the authors noted Galaxy

Digital estimates that these inflows Will come over a prolonged period if Galaxy digital's estimate of $14 billion In initial inflows is correct then this Would increase btc's market cap by $32 Billion per glass nodes realized cap of Bitcoin indicator this would translate To a more modest pump of around 5% Bringing btc's price up to around 40K Compared to today's price of around 37k There's just one problem with this Analysis and that's that the impact of These flows goes both ways the 3x Factor Applies to selling too to refresh your Memory JP Morgan estimated that the spot Bitcoin ETF derived from gbtc could Experience up to 2.7 billion in selling Pressure this is based on the assumption That the $2.7 billion of buying pressure Gbtc has seen since the start of the Year was driven primarily by Institutional investors who wanted to Capitalize on this Arbitrage trade the Thing is that this likely underestimates The amount of gbtc selling by a wide Margin take a second to consider that Gbtc currently holds almost $23 billion Of BTC now consider that digital Currency group the parent company of Grayscale holds as much as 10% of gbtc Total Supply I should note that this is Based on data from November last year so It may be outdated what is not outdated However is the fact that dcg still owes

Billions of dollars to creditors and has Been selling assets to plug the hole Coindesk being a recent example Depending on dcg's financial situation At the time of the spot Bitcoin ETF Conversion it could could sell some or All its gbtc to payback creditors here Is where things get a bit crazy whereas The buying pressure for a spot Bitcoin ETF would likely come over the course of Weeks or months the selling pressure From the gbtc conversion would likely Happen much faster given that investors Would want to capitalize on that Unrealized gain as soon as possible now At first glance this doesn't seem to be A big deal even if we assume a combined Cell pressure of five billion from dcg And other gbtc investors this would only Amount to a $15 billion change in btc's Market cap which would likely correspond To a dip of no more than a couple of Percentage points at best upon closer Inspection however you realize that BTC Investors are extremely bullish about The prospect of a spot Bitcoin ETF Approval this is evident in the size of Call options and long positions in the Derivatives Market along with sentiment Readings which are hitting their Greediest levels since 2021 it's safe to Assume that the long leverage and the Bullish sentiment will go parabolic when The spot Bitcoin ETFs are approved this

Means that the few billions of dollars Of selling pressure from gbtc arbitrages Would likely result in liquidations that Could take btc's price much lower than People expect this would coincidentally Mirror what happened to Gold after its Spot ETF was approved in 2003 a decline Of 10% or more in the first weeks that Followed but as we've learned what comes After that will be the biggest gains the Financial world has ever seen BTC Literally going to the moon and just Wait until that money starts rotating Into altcoins it will be a bull market For the history Books and that's all for today's video So if you learn something new Smash that Like button to let us know if you want To keep learning subscribe to the Channel and ping that notification Bell And if you want to help others learn Take a second to share this video with Them don't forget that the coin Bureau Deals page has trading fee discounts of Up to 60% and bonuses of up to $40,000 On the best crypto exchanges as well as The biggest discounts on the best Hardware wallets the link to that will Be down in the description thank you all So much for watching and I'll see you Next time this is Guy signing Off [Music]


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