Significant changes are emerging in the cryptocurrency world, potentially bringing fresh capital into the market. According to research firm CryptoQuant, the approval of exchange-traded funds (ETFs) based on Bitcoin could nearly double its market capitalization.
In recent years, the cryptocurrency market has come a long way, from a niche investment to a major financial stream. Now, another potential leap in its evolution lies ahead. With the potential introduction of Bitcoin-based ETFs (exchange-traded funds), the market capitalization of this digital currency could increase significantly.
Currently, according to CoinGecko data, Bitcoin’s market capitalization is about $550 billion. However, considering CryptoQuant’s predictions, this could increase to as much as $900 billion, mainly due to the funds that will flow into the market from institutions. This means that the entire cryptocurrency market capitalization could increase by nearly 1 trillion dollars.
Historically, the potential for fresh money that could enter the Bitcoin market through ETFs would exceed the funds introduced into the GBTC fund, the largest existing Bitcoin fund. This is the Grayscale Bitcoin Trust, which differs from an ETF. Its shares are not currently registered as securities, and were initially available only to accredited investors with a six-month holding period. Although the company tried to convert GBTC into a Bitcoin ETF, it was denied by the U.S. Securities and Exchange Commission (SEC).
Meanwhile, many investors and companies from Wall Street have turned to the SEC with applications for approval of a Bitcoin-based ETF fund. The interest is so great that even the world’s largest asset manager, BlackRock, has filed the appropriate application.
Cryptocurrency ETFs allow investors to engage with digital assets without the need to purchase and store them. Despite their potential benefits, the SEC has so far been cautious in approving these products, mainly due to concerns about market manipulation.
However, many experts now believe that Wall Street’s approval of a Bitcoin-based ETF is only a matter of time. Analysts from Bloomberg Intelligence predict there is a 90% chance that the U.S. market will have such an ETF by January 10.
The future of Bitcoin and the entire cryptocurrency market seems to be full of promising opportunities. The introduction of ETFs could not only attract fresh capital but also make the market more accessible to a broad range of investors.
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