CryptoQuant Predicts Bitcoin Spot ETF Approval to Skyrocket Crypto Market Cap by $1 Trillion

According to recent assertions by CryptoQuant, the potential approval of Bitcoin spot exchange-traded funds (ETFs) could lead to an astounding growth in the crypto market. The data analytics firm predicts that if these ETFs are approved, the Bitcoin asset is poised to grow by a massive $900 billion, with the overall crypto market swelling by $1 trillion.

A wave of institutional adoption of Bitcoin from 2020-2021, in which institutions have been adding Bitcoin to their balance sheets, is likely to be succeeded by financial institutions providing Bitcoin access to their clients via spot ETFs.

The flow of funds anticipated from spot ETFs would far exceed the sums that entered the Grayscale Bitcoin Trust (GBTC) during the last bull market cycle. The GBTC currently retains the title of the world’s largest cryptocurrency fund, with a staggering $16.7 billion in assets under management.

CryptoQuant estimates that if issuers waiting to list Bitcoin ETFs apportion just 1% of their Assets Under Management (AUM) to these ETFs, an influx of roughly $155 billion could enter the Bitcoin market. This sum constitutes nearly one-third of Bitcoin’s current market capitalization, and should this scenario occur, it could potentially catapult Bitcoin’s price to between $50,000 and $73,000.

Historically, during previous bull markets, Bitcoin’s market capitalization has inflated 3-5 times more than its realized capitalization. This signifies that for every fresh dollar entering the Bitcoin market, the market capitalization could balloon by $3-$5.

Accompanying the bullish sentiment is the continuing shrinkage of the GBTC discount to its lowest in almost two years. The cryptocurrency market capitalization first surpassed the $1 trillion threshold in January 2021. At present, the total market cap is approximately $1.13 trillion, with Bitcoin accounting for over half of the total.

The high-octane reaction of the market to the launch of a real ETF was recently evidenced when a false report momentarily caused Bitcoin to surge to $30,000. As the Bitcoin spot ETFs inch closer to approval, several others are lining up for approval. This array of ETFs, managed by firms with collective AUMs of around $15.6 trillion, can potentially pump $155 billion into Bitcoin if only 1% of their AUM is invested.