The arrival of a bitcoin (BTC) Spot Exchange Traded Fund (ETF) is highly anticipated by the crypto community. Investors hope that approval of the fund on the American stock exchanges can ensure that a lot of institutional capital flows into the cryptocurrency market. This can result in explosive increases in prices.
According to an advisor at VanEck, one of the major asset managers that has an outstanding Bitcoin fund application, price performance may be disappointing in the short term.
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Impact of ETF on BTC price may be disappointing in the short term
The BTC price had a good end to the year. Investors have their sights set on an approval of the Bitcoin Spot ETF in January this year. The result is that the bitcoin price has risen sharply since October, from $27,000 to a current value of $42,600.
This amounts to a price increase of no less than 57%. The market therefore seems to have already priced in the arrival of the fund. The fact that the market has already priced in the merits of a Spot ETF could possibly be a sign that a BTC correction may occur in the short term, so licht VanEck advisor Gabor Gurbacs further expands on social media platform X.
According to the advisor, the impact of the BTC Spot ETF in the short term is significantly overestimated. Gurbacs expects only a few hundred million dollars in capital inflows, most of which were already in the market. Combined with the fact that large earnings have already been priced in, a correction is likely according to the VanEck advisor.
In my view, people tend to overestimate the initial impact of U.S. Bitcoin ETFs. I think maybe a few $100mm flows (mostly recycled) money.
Long term, people tend to underestimate the impact of spot Bitcoin ETFs. If history is any guide, gold is worth studying as a parallel.
— Gabor Gurbacs (@gaborgurbacs) December 31, 2023
Long-term earnings of BTC Spot ETF are underestimated
Gurbacs also predicts that investors will underestimate the long-term earnings of the much-discussed fund. Over a long period of time, many billions of dollars could flow into the crypto market, leading to trillions of dollars in value. Here the advisor also makes a comparison with gold, the precious metal managed to rise enormously in price after a gold ETF was launched in 2004.
An ounce of gold rose from $400 to $1,800 in 8 years, adding $8 billion in market value to the precious metal. A similar scenario could occur for bitcoin, Gurbac expects.
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2024-01-01 17:41:55
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