Bitcoin Equilibrium Price Likely to Top $168,000 Following ETF Approval, FSInsight Says

Demand for ProShares’ bitcoin futures ETF is likely to exceed $50 billion in the first year.

AccessTimeIconOct 19, 2021 at 11:10 a.m. UTC
Updated May 11, 2023 at 3:22 p.m. UTC

Bitcoin will extend gains following the approval of the first bitcoin futures exchange-traded fund (ETF) in the U.S., according to Tom Lee, head of research at FSInsight, a markets strategy and research firm, in a note.

The 10 largest ETF launches witnessed inflows of $14 billion in their first year, on average. The most successful was the Nasdaq 100 ETF (NASDAQ: QQQ) in 1999, with inflows of $36 billion. FSInsight expects demand for ProShares’ Bitcoin Strategy ETF to surpass that of QQQ and forecasts inflows of more than $50 billion.

The new ETF, which starts trading on the New York Stock Exchange today, will also allow many more investors to allocate to crypto. This will result in significant new inflows, which will result in price gains, FSInsight says.

FSInsight estimates that bitcoin daily demand will increase by $50 million due to ETF inflows. If the block reward is $10 million per day, the “equilibrium price to clear this, based on analysis by our data science team = $168,000.”

This equilibrium price, which is the value at which demand for bitcoin meets supply, is above FSInsight’s bitcoin year-end target of $100,000. Bitcoin was trading at about $62,260 as of publication time.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Author placeholder image

Will Canny is CoinDesk's finance reporter.


Read more about