Bitcoin In 2024: What Are The Possible Impacts Of A Spot ETF Approval

  • A potential spot BTC ETF approval is expected to have many impacts on the coin’s price.
  • It is expected to lead to a rise in institutional participation in the crypto market.
  • Some even opine that it might lead to a significant jump in BTC’s price.

According to Bloomberg analysts, the long-awaited approvals of U.S. spot Bitcoin Exchange-Traded Funds (ETFs) could finally arrive in January, potentially fueling a significant price rally in 2024.

In a recent post on X (formerly Twitter), senior ETF analyst at Bloomberg, Eric Balchunas noted that there is a 90% chance that the U.S. Securities and Exchange Commission will grant its first spot ETF approval by January 10. 

One of these amended filings came on December 22 when BlackRock submitted an amended Form S-1 with the SEC. According to the filings, the asset manager intends to allocate a seed fund of $10 million for its spot Bitcoin ETF. 

Commenting on the significance of this move, Bloomberg analyst James Seyffart noted that this could motivate the SEC to grant its approval to BlackRock’s ETF application in early January.

Some Possible Impacts

An obvious impact of the potential approval of a spot Bitcoin ETF is that it would improve the relationship between the cryptocurrency market and traditional financial institutions.

Due to crypto’s current regulatory regime, institutional investors and traditional finance institutions have limited exposure to Bitcoin (BTC). A spot ETF offers a familiar, SEC-approved vehicle for investment for participants within this market cohort. 

A spot ETF approval would strongly endorse BTC’s legitimacy, resulting in significant capital inflow from more serious players. 

With institutional money entering the market, trading volume and liquidity could increase significantly. This would lead to tighter spreads and a more efficient market overall.

Also, through an ETF,  companies could develop new financial products and services backed by BTC and tailored towards the needs of institutional investors. 

Commenting on the potential impacts of a spot ETF approval on the BTC market, crypto analyst Nicholas Sciberras noted:

The (approval) could funnel between $30 billion to $300 billion into Bitcoin.

Additionally, in a recent interview with CNBC, Grayscale CEO Michael Sonnenshein said that a spot ETF approval would allow financial advisors, who manage investments for their clients, to include BTC in their portfolios, unlocking around $30 trillion in advised wealth for the leading crypto asset. 

Sonnenshein said:

We are really talking about the advised market here in the US, which is today, about $30 trillion worth of advised wealth that we hope the approval of spot Bitcoin ETFs, the up-listing of GBTC, will allow for that opportunity and for those investors to partake in it as well.

Further, with ETFs, cryptocurrency exchanges might have to deal with increased competition. Investors who have previously traded their BTCs on exchanges might flock to the ETF, impacting exchange revenue from trading fees.

In a recent post on X (formerly Twitter), the president of ETF Store Nate Geraci, stated that once a spot Bitcoin ETF is approved in the U.S., it “would be a “bloodbath” for cryptocurrency exchanges.”

Sharing a similar opinion, analyst Balchunas in an interview with Laura Shin, noted that crypto exchanges that currently make “a ton of money on their really high fees” will suffer a decline once ETFs are floated.

What Is Expected Of The Coin’s Price

Regarding how a spot ETF approval might impact BTC’s price in 2024, CEO of Blockstream Adam Back noted that the coin’s value might skyrocket to $1,000,000.
Sharing a more conservative view, analyst Anthony Scaramucci noted in an interview that the approval could push BTC’s price to $330,000.

Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.

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