The Impact of U.S. Bitcoin ETFs on Bitcoin's Future

According to a report by JMP Securities, spot Bitcoin ETFs (exchange-traded funds) in the U.S., approved on January 10 this year, could see inflows of up to $220 billion over the next three years.

This forecast suggests a potential fourfold increase in Bitcoin’s price to $280,000, driven by the impact of new capital inflows. Crypto exchange Coinbase is seen as being in a particularly advantageous position to benefit from these growing inflows.

A Growing Trend

JMP Securities' analysis highlights that the initial inflow into spot Bitcoin ETFs, which reached $10 billion within just two months of their launch, is merely the beginning of a much larger trend. With expectations of continued inflows following the initial ETF approval process, JMP predicts that the total market impact of these inflows could be significant for Bitcoin's price.

25x Multiplier Effect

With an estimated multiplier effect of approximately 25x for new capital, the forecasted inflows of $220 billion alone could increase Bitcoin’s market value by $5.5 trillion, corresponding to a Bitcoin price of $280,000. This optimistic outlook places Coinbase in a favorable position, prompting JMP Securities to raise its price target for Coinbase stock to $300 from the previous $220, making it the highest among Wall Street analysts, according to FactSet data. At the time of reporting, Coinbase shares were trading at $262.92.

JP Morgan’s Take

This development is supported by a separate analysis from JPMorgan, estimating that the market for spot Bitcoin ETFs could grow to around $62 billion over the next two to three years. This forward-looking analysis underscores the potentially massive impact that inflows into spot Bitcoin ETFs could have on the market and specifically on Bitcoin's price, marking the start of a new era for cryptocurrency investments.

Source: Bloomberg, CoinShares, as of March 8, 2024

Virtune

In Sweden, there is a domestic alternative comparable to U.S. ETFs called Virtune. They offer 100% physically backed products listed on Nasdaq with the highest institutional security standards. These products can be traded on Avanza, Nordnet, and Handelsbanken, with Virtune aiming to become the largest crypto asset manager in the Nordic region.

A Long-Term Commitment

Virtune has taken the long and rigorous path to develop high-quality products. Their physically backed products mean that the underlying cryptocurrency is securely stored on your behalf by Coinbase with the highest institutional-grade security. These cryptocurrencies are held separately from Virtune, ensuring strong investor protection. Virtune’s products are always backed by real cryptocurrencies. Learn more about their Bitcoin ETP here: Virtune Bitcoin ETP.

Disclaimer: Marketing material by Virtune AB. Crypto investments involve high risk. Virtune does not provide investment advice. Investments are made at your own risk. Securities can increase or decrease in value, and there is no guarantee of recovering invested capital. Read the prospectus, KID, and terms on www.virtune.com.