According to a report recently published by NYDIGa firm specializing in crypto sector analysis, spot Bitcoin ETFs could lead to a massive injection of capital into the market. According to the latest estimates by observers, the latter would exceed the threshold of 30 billion dollars.
Bitcoin spot ETF: what impact on the whole crypto sector?
For several weeks now, we have noticed the emergence of a general frenzy over spot Bitcoin ETFswith in particular multiple requests from several investment firms such as Fidelity, but also BlackRock and Ark Invest.
To note that Larry Fink, the managing director of Blackrock, recently described Bitcoin as a game-changer for the entire global finance industry, which stands in stark contrast to his past stances on the crypto industry. In this regard, the report of the analysis company DYDIG underlines and states:
“The recognition of the BlackRock brand and the iShares franchise, as well as the latter’s familiarity with the methods of buying and selling through stockbrokers, could provide certain advantages when setting up a spot Bitcoin ETF compared to existing alternatives. »
NYDIG has already made an estimate that reports 2$8.8 billion in Bitcoin assets under managementof which $27.6 billion in products of the type spot (in cash). Furthermore, the true potential of a spot Bitcoin ETF lies in a confluence of factors: the enthusiasm generated by the initial launch phase of the ETF in questionwith a US Dollar registering bearish momentum and the Federal Reserve moving towards quantitative easing.
We must also take into account the impact of the narrative describing a generational transfer of wealth towards younger individuals who are more inclined to invest in the crypto sector. This is supported by an in-depth study recently published by the platform bitget about the relationship between demographic changes and ecosystem adoption rates across generations.
According to this analysis, Generations Y and Z are the most favorable to cryptocurrencieswith a dominance of millennials on the sector, the latter being more familiar with the Internet and digital technologies compared to older generations.
A possible comparison between future Bitcoin ETFs and Gold ETFs?
Bitcoin is very often referred to as digital gold, so it makes sense to make a comparison with the performance of Gold ETFs listed in the early 2000s. Currently, they only hold 1.6% of the total global gold supply while central banks hold gold 17.1%while bitcoin funds hold 4.9% of the total bitcoin supply.
There is a huge gap between the demand for the digital and analog version of the asset in funds: there are more than $210 billion invested in gold funds when there is only $28.8 billion in bitcoin-related funds.
Also according to NYDIG reportBitcoin is about 3.6 times more volatile than goldwhich means that at equivalent volatility, investors would need 3.6 times less bitcoin than gold on a dollar basis to gain such a large risk exposure. This is definitely bullish analysis and that leaves room for explosive growth for the dominant digital asset in the crypto ecosystem.
Source: Ecoinometrics