According to cryptocurrency expert Michael Strutton, once Bitcoin exchange traded funds (ETFs) become a reality they could drive Bitcoin’s price up to USD 35,000, well above the record high of USD 20,000, since ETFs would allow people to buy Bitcoin with the same platforms and mechanisms used to buy stocks. Currently, no Bitcoin ETFs exist in the United States due to Securities and Exchange Commission (SEC) regulations, but there is at least one organization in talks with the SEC to create the first Bitcoin ETF.
Once a Bitcoin ETF is approved and starts trading on the stock market, anyone with a typical stock investment account could buy Bitcoin. This would open up the Bitcoin market to a tremendous amount of money. For example, Fidelity manages USD 5.4 trillion of assets, Charles Schwab USD 2.7 trillion, Edward Jones USD 800 billion, Ameriprise Financial USD 800 billion, TD Ameritrade USD 600 billion, and there are many more broker-dealers with stock trading platforms besides these.
In comparison, the entire Bitcoin market cap is only USD 105 billion which supports the current price of USD 6,150 per coin. It would only take a tiny fraction of the money being managed by broker-dealers to move into Bitcoin to cause a massive price increase. Michael Strutton calculated that the introduction of Bitcoin ETFs would cause Bitcoin to rise to between USD 26,000 and USD 44,000, which would yield a Bitcoin market cap between USD 450 billion and USD 750 billion.
This is not even as bullish as some of the other forecasts, like Ethereum co-founder Charles Hoskinson who says USD tens of trillions will enter the cryptocurrency markets from institutional investment. This would yield a Bitcoin price in excess of USD 500,000.
The SEC has blocked Bitcoin trading on the stock market via ETFs up to this point, mostly because the proposed ETFs were based on Bitcoin futures contracts on CME and CBOE which the SEC thinks are too risky due to lack of liquidity. VanEck and SolidX have teamed up to create an ETF called XBTC that is backed by actual Bitcoins and addresses the SEC’s concerns.
It remains to be seen if XBTC has what it takes to get approved by the SEC, but if it does get approved and Michael Strutton is correct, then Bitcoin’s price will undergo a tremendous increase to levels never seen before.
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