Possible Impacts of Spot Bitcoin ETF Approval on the Crypto Market-banner-imageResearch

Possible Impacts of Spot Bitcoin ETF Approval on the Crypto Market

Due to the bear market we have been in for about 1.5 years, cryptocurrencies have been experiencing a decline since the middle of last year. The decreasing volatility day by day and the decline in volumes caused the market to fall into the trap of motonality. The projects affected by the low liquidity and the decrease in new money inflows have led to a decrease in new developments that would revitalize the market.

However, the developments in spot Bitcoin ETFs in the last 3 months have caused the sector to bleed again. With the formation of news flow that will create volatility in the market, it has led to new price movements. While the eyes turned to the halving that will take place in 2024, the spot Bitcoin ETF application of BlackRock, the company that manages the world's highest fund, changed all metrics.

Although ETF approval is a development that will open the door for institutional investors to Bitcoin, progress could not be made at this point due to the fact that the US Securities and Exchange Commission (SEC) only approves futures Bitcoin ETFs but leaves spot ETFs constantly subject to rejection or postponement. BlackRock's involvement in the game led to a belief that the process would be reshaped and the SEC's attitude would change. As a matter of fact, the developments have shown that the attitude has changed in a way that has not been experienced before, even if not radically. Instead of directly rejecting or postponing the applications, the SEC took the first moderate step by providing regulation and development guidance.

Although the SEC's approach to cryptocurrency markets has been rigid and restrictive, industry-specific but unrelated developments after BlackRock's spot Bitcoin ETF application have strengthened the belief that approval will come. The conclusion of the lawsuit with Ripple against the SEC was the first spark. On the other hand, GrayScale, the company with the one of the highest number of Bitcoins in the world, announced that it would not appeal the decision of the government agency in its case with the SEC. Will the approval really come?

While the lawsuits in the US continue, a few developments in the markets have caused price manipulation as well as stimulated the sector. First, Cointelegraph's false news that the spot Bitcoin ETF was approved caused the price to suddenly rise above $30,000. This showed investors that Bitcoin was poised to rise. Subsequently, news that BlackRock's spot Bitcoin ETF was listed on NasDaq's DTCC, which carries out NasDaq's clearing operations, removed the negative impact of the previous fake news and caused a rise again. This situation has again and again revealed that the markets are looking for an excuse to rise outside the halving.

What could happen if the approval comes?

CryptoQuant's research spotlight has revealed some data that will allow us to comment on the possible consequences of Bitcoin approval. In the report, which was prepared by considering the impact of the money entering the market in the past bull seasons on the Bitcoin price, it was observed that every $ 1 corresponds to a value between 3 and 5 dollars.

If each company invests only 1% after the Spot Bitcoin ETF approval...

The research predicts that an average of 150 billion dollars of money could enter the market, based on the consequences of companies investing in Bitcoin with 1% of their assets. This leads to a value of 450 billion dollars when the previous calculation is included in the equation. It is predicted that this significant increase in value can raise the price up to 50 thousand to 73 thousand dollars.

Bitcoin market capitalization could be 1 trillion dollars

When this predicted value increase is added to Bitcoin's current market capitalization, it claims that Bitcoin could have a market capitalization of 1 trillion dollars. In this case, the market capitalization of altcoins and positive price movements with the hype that may be experienced can enable the total market capitalization to reach serious levels.