Crypto investors are awaiting Security & Exchange Commission (SEC) approval for a spot bitcoin ETF, which could unlock a surge of capital investment in the crypto space. However, this isn't the first time that crypto news created a stir of hype around digital assets, but is this time truly different?
Markus Thielen, DeFiResearch.com Head of Research, joins Yahoo Finance to discuss what this ETF approval could mean for bitcoin and the crypto space, and why he feels that if approved, it could potentially reach a high price target.
"I think, to put it in numbers, there's around $120 billion US dollars in precious metals ETFs in the US, so that means in gold and in silver, and if you just move 10-20% of those and shift them over into bitcoin you have certainly sort of something in the range of like $25 billion of inflow," Thielen says. "And we calculated this might have an impact of every $1 billion dollars of 4% impact on the price , so we might actually see kind of a price towards $57,000."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
RACHELLE AKUFFO: Now, Marcus, this isn't the first time that we've been waiting for this, you know, a big catalyst for bitcoin. And as you talk about the spot bitcoin ETF, other countries that have launched it didn't see a massive rally. Why will this time be different?
MARKUS THIELEN: Well, the US is, of course, the largest pool of capital. And of course, ETFs are only really established in the US. You know, we have seen this a long time, you know, in Asia, how Asia tried to establish ETFs. But people don't really use them, and I think this is because the investor base is very different for the US market than anywhere else.
And the US is really dominated by a lot of institutions. And those institutions are using ETFs really in their asset allocation. Of course, we have the registered investment advisor community, and estimates vary from-- you know, they managed 5 trillion to even more. But if they move like one of those-- 1% of those 5 trillion, that's like 50 billion into bitcoin, right?
And I think that could have like a big impact because we sort of can calculate if the market cap changes, you know, what might be the implications for the price of bitcoin. And what has really changed is really that we have, you know, certain judges telling around the-- telling the SEC around the grayscale lawsuit to go back and reevaluate their estimates.
We're having BlackRock as, you know, the largest asset manager in the world also filing for a bitcoin ETF. So I think the pressure is really building. And then there is an overall sentiment that the market had that the US regulatory regime is trying to clean up the market. So-- and the last missing piece in this puzzle was for example to sort of like eliminate an exchange from the US market that has been known and admitted to had, you know, illicit trading going on.
AKIKO FUJITA: Marcus, you said even if one of these bitcoin ETFs move that could have a big impact. We're looking at bitcoin roughly at $37,000 right now. What does that move look like? How much higher can it go?
MARKUS THIELEN: Yeah. I think, you know, we have we have heard a false rumor that proved not true where bitcoin rallied 10%, you know, literally in a heartbeat. So we would estimate if a if a spot bitcoin ETF would be approved. Bitcoin could go up easily 20%. And I think you know to put it in numbers, there's around $120 billion USD in precious metals ETFs in the US. So that means in gold and in silver.
And if you just move you know 10, 20% of those, shift them over into bitcoin, you know, you have certainly sort of something in the range of like $25 billion of inflow. And we calculated this might have actually an impact of every $1 billion, a 4% impact on the price. So we might actually see kind of a price towards kind of 57,000 we calculated we can see if there an approval for the bitcoin ETF.
AKIKO FUJITA: 57,000 in the medium term?
MARKUS THIELEN: In the medium term, yes. I mean, it sounds reasonable, right, when you look at-- you know, we were just at 25,000 like two months ago, and now we're at 37,000. So this is just literally like you know sort of like 12,000 rally that we had, so another 12,000 point rally. You know, it gets us already like two to the 50,000 point area.
So I think this can easily happen. And again, as I said, if you if you put in kind of the macro tailwinds of the fed pausing, if you compare to the 2017 episode when the CME announced the bitcoin future, I mean, I think there is just a lot of tailwind, and I think there's a lot of pent up demand. And you know, don't forget we have all these ETF providers. They are, of course, doing a lot of marketing. There are a lot of educational.
And, you know, Larry Fink as the CEO from blackrock is almost you know every other day on TV and saying how important the bitcoin ETF is. So I think there is a coordinated marketing effort now to really bring prices higher.
Bitcoin may reach $57K over pending ETF approval: Analyst - Yahoo Finance
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