Bitcoin ETFs Could Trigger a $30 Billion inflow into Bitcoin
Bitcoin exchange-traded funds (ETFs) could potentially trigger a $30 billion demand, according to a report by NYDIG.
A recent report from crypto trading company NYDIG suggests that Bitcoin exchange-traded funds (ETFs) could create a $30 billion demand for the popular digital currency. This comes as BlackRock, Fidelity, and others have shown interest in these ETFs.
NYDIG highlights the benefits of a Bitcoin ETF, including brand recognition, simplicity of transactions and reporting, and familiarity with the purchase process. The report notes that $28.8 billion in bitcoin is currently managed, with $27.6 billion in products similar to ETFs.
Bitcoin is often compared to gold, and this comparison extends to their ETFs. Today, gold ETFs account for 1.6% of all the gold available worldwide, while Bitcoin funds hold 4.9% of the total Bitcoin supply.
However, the demand for gold and Bitcoin funds differs greatly. Over $210 billion is invested in gold funds, while only $28.8 billion is in Bitcoin funds. Despite Bitcoin being 3.6 times more unstable than gold, the report estimates that a Bitcoin ETF could attract nearly $30 billion in new demand.
Econometrics, a newsletter, has a more cautious view of a Bitcoin ETF. They argue that a Bitcoin ETF could generate more interest and money in Bitcoin, but it wouldn't single-handedly make the price of one Bitcoin reach $100,000.
They suggest that a Bitcoin ETF's success would depend on various factors such as a weaker US dollar, moves towards Quantitative Easing by the Federal Reserve, and a shift in wealth to younger people more likely to invest in crypto.
