As the market awaits a decision from the U.S. Securities and Exchange Commission over spot exchange-traded fund filings, analysts are predicting that bitcoin ETFs may see well over $1 billion in inflows over the next three months, and potentially more than $100 billion by the end of the year.
Standard Chartered Bank, which has also predicted that bitcoin will rise to $100,000 by year-end, is expecting significant inflows into the funds if the SEC approves the products.
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The bank predicts in a report that there will be inflows of $50 billion to $100 billion this year if there's a win for the asset managers who have applied to issue spot bitcoin ETFs. This means between 437,000 and 1.32 million new bitcoins would be held in U.S. ETFs by the end of 2024.
If the inflows materialize as expected, bitcoin could rise to levels closer to $200,000 by the end of 2025, said the bank.
Standard Chartered compared the potential bitcoin ETF to the first U.S.-based gold exchange-traded product, which launched in November 2004. Following this, the price of gold rose over 4x in the seven years it took for gold ETP holdings to mature.
Bitcoin gained around 155% over the last year and is up 6% since the start of 2024, according to data from Messari. Standard Chartered said that following an approval, bitcoin could witness similar gains to what gold did, but over a shorter time period (one to two years). "Our view is the BTC ETF market will develop more quickly," said the report.
Will McDonough, chairman and founder of Corestone Capital, is also predicting heavy demand for a bitcoin ETF if it's approved. McDonough thinks there will be approximately $1 billion worth of inflows by the end of the first quarter of this year.
"The obstacle of self custody has kept many investors out of the asset class, through approving a 40 Act structure that can give investors exposure in their traditional brokerage accounts, means the demographic of investors that can allocate even just 1% of their portfolio to this growing alternative asset class is exponential, and I think price activity (given the fixed supply of Bitcoin) will be just as big," McDonough said.
Galaxy Digital predicted in an October report that ETFs would attract at least $14.4 billion of inflows in the first years of issuance. "The inflows could ramp up by $27 billion by the second year and $39 billion by the third year," said the report.
There are also a number of asset managers who have filed for spot ether ETFs with a final deadline for a decision in May. Standard Chartered said in the report that it expects the SEC to allow ether ETFs.
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