Since the approval of the Bitcoin spot ETF for listing last month, the average daily trading volume of related ETFs has approached the trading volume of Bitcoin on centralized exchanges. Garry Thewise, the product manager of CryptoQuant, stated today that once the trading volume of ETFs exceeds that of centralized exchanges, the impact of large institutions on the price of Bitcoin will be more significant.
Bitcoin spot ETF trading volume approaches CEX
ETFs will have a significant impact on BTC price in the long term
Institutional investors are bullish on Bitcoin
The U.S. Securities and Exchange Commission (SEC) approved the listing of the Bitcoin spot ETF. This is an important step for Bitcoin to move towards the mainstream. During this period, although Grayscale’s GBTC has continued to show outflows, reducing its Bitcoin holdings by 140,825 BTC, other 8 spot ETFs, including BlackRock, increased their holdings by 175,479 BTC, resulting in a net inflow of funds.
At the same time, Garry Thewise, the product manager of CryptoQuant, tweeted today that the trading volume of ETFs has already taken up a considerable proportion compared to centralized exchanges. Once the trading volume of ETFs exceeds that of centralized exchanges, the impact of large institutions on BTC price will be more significant.
Data shows that the total trading volume of 9 Bitcoin spot ETFs, including ARKB, BITB, BRRR, BTCO, BTCW, EZBC, FBTC, GBTC, HODL, and IBIT, reached 1.018 billion USD on the 2nd, while the trading volume of Bitcoin spot on centralized exchanges was 1.4 billion USD.
Comparison of trading volume between centralized exchanges and Bitcoin spot ETFs. Image Source: CryptoQuant
Forbes pointed out that in the long term, Bitcoin ETFs may have a significant impact on the price of Bitcoin. The maximum supply of Bitcoin is 21 million coins, and currently, several thousand coins flow into ETFs daily, while only 900 BTC are mined daily. After the next mining reward halving, only 450 BTC will be available for mining daily.
If the demand continues, the fixed supply of Bitcoin may make it more difficult to create new ETF shares. This means that ETFs may significantly affect the price of Bitcoin, as they may have to directly purchase Bitcoin from exchanges.
The report mentioned that ultimately, the impact of ETFs on the price of Bitcoin will last for months or even years, rather than just a few hours or days. The short-term expectations and enthusiasm for Bitcoin spot ETFs in the market may be exaggerated, but the long-term impact may be severely underestimated.
Previously, Cathie Wood, the founder of Ark Invest, known as the “Queen of Stocks,” boldly predicted that with the approval of the Bitcoin spot ETF by the SEC, the fundamental price of Bitcoin would reach $600,000. In a bullish scenario, it could even reach $1.5 million by 2030.
Tom Lee, the founder of Fundstrat and a well-known Wall Street analyst known as the “Bitcoin Bull,” predicted that the price of Bitcoin could rise to $100,000 or even $150,000 in the next 12 months. Due to the deflationary nature of Bitcoin and the purchasing demand brought by ETFs, Bitcoin may even soar to $500,000 within the next 5 years.
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