The price of Bitcoin (BTC) may be heading to $600,000 if inflows into the newly launched Bitcoin ETFs reach projected levels.
The price of Bitcoin has risen significantly in the past month since the launch of spot Bitcoin ETFs in the U.S. The funds have attracted over $5 billion in net inflows, with an average of $425 million added in the past five days alone.
Given the impact that the inflows into Bitcoin ETFs have had on price, analysts have sought to measure how high the price of BTC could go if the current level of inflows is sustained.
Popular Bitcoiner British HODL recently employed an 80x multiplier as the average of how much the Bitcoin price moves based on the amount that flows into the ETFs daily.
Let's try something before the #Bitcoin ETF flow data comes out for today.
This is going to be an approximate, but we can try guessing.
The open was at $48,313.
We're high at $50,333.
So a $2,020 price appreciation and a $42 BILLION market cap increase.
Assuming an 80-105x…
— British HODL ❤️🔥🐂❤️🔥 (@BritishHodl) February 12, 2024
A further analysis shows that for every $1 billion that flows into the ETFs, the price of Bitcoin has moved by an average of $2,900. As a result, if the inflows are sustained over time, the price of Bitcoin will keep rising at a similar level, reaching new highs in the coming months.
Bitcoin ETFs Projected to Attract $150B Inflows
The early success of the Bitcoin ETF appears to back claims that the funds will eventually attract at least $150 billion inflows over time.
However, the founder of the Digital Assets Council of Financial Professionals (DAC FP), Ric Edelman, expects the ETFs to reach that level of inflows before the end of 2025.
In a recent CNBC interview, Edelman noted that individual financial advisers have already shown a willingness to allocate funds to the Bitcoin ETFs and that their demand alone would be enough to drive $150 billion of inflows into BTC.
Citing surveys done by DAC FP and Bitwise, three quarters of these financial advisers plan to allocate around 2-2.5% of their holdings to the Bitcoin ETFs.
Overall, independent financial advisers manage around $8 trillion in assets, with a potential 2% allocation putting the total inflows into BTC ETFs at around $160 billion, influencing the $150 billion estimate.
Ric Edelman, founder of the Digital Assets Council of Financial Professionals: "I'm anticipating $150 billion of net inflows into #Bitcoin ETFs by the end of 2025, we are at $5 billion now" pic.twitter.com/ggy5vqHqlC
— Rhino Bitcoin App (@RhinoBTCapp) February 14, 2024
Meanwhile, employing the average 80x multiplier effect that inflows into the ETFs have had so far on Bitcoin’s price means that the price of the cryptocurrency could go as high as $600,000.
Such a price would put the asset’s market capitalization at $11.7 trillion, around the equivalent of its much-compared counterparty, Gold.
Granted, there is no guarantee that the current level of inflow will persist. Also, it remains to be seen if the projected $150 billion inflows will come at a steady rate or be spread across various market cycles.
Either way, the core takeaway is that the Bitcoin ETFs may continue to impact Bitcoin’s price positively in the long term, putting some bullish BTC predictions into the realm of possibility.
Bitcoin is trading above $52,200 at the time of writing, with its market cap now above $1 trillion for the first time since late 2021. The cryptocurrency’s dominance level also stands at 52.5%, with most altcoins struggling to keep up amid the rally.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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