The Bitcoin ETF is expected to attract substantial funds from institutional funds. Coinbase believes, however, that these flows will not materialize all at once.
Coinbase and the impact of the Bitcoin ETF
Bitcoin has appreciated more than altcoins recently. Up more than 60% since the start of the year, it is benefiting from geopolitical uncertainty and the anticipation of a green light from the SEC for the ETF.
Coindesk reports that bitcoin is up 8% since BlackRock filed its ETF application in mid-June. Conversely, Ethereum, second in the hierarchy of altcoin capitalizations, fell accordingly. The ETH/BTC exchange rate is almost 20% lower.
David Duong, head of institutional research at Coinbase, believes that this divergence is explained by expectations regarding the Bitcoin ETF:
“We believe that bitcoin’s outperformance shows that the potential approval of one or more bitcoin ETFs is already partially priced in. It is therefore not clear to what extent bitcoin could still appreciate in the event of a favorable decision from the SEC. »
The Coinbase report published on Monday also notes that bitcoin appreciated despite the Fed’s rate hike. “This deviation became evident from mid-June, around the time many bitcoin ETFs were filed in the United States”we can read.
“In the event of one or more bitcoin ETF approvals, we believe there could be a significant influx of money, which however may take time to materialize”writes Mr. Duong.
Institutionals play the long game
In any case, let us emphasize that institutional investors have long-term investment strategies. In other words, the next bull market could this time not fall like a bellows.
There will certainly be an element of speculation when the combined effect of the halving and the ETF causes the market to bubble up. But maybe we won’t see a 70% drop like we often have in the past.
One thing is certain, halving will reduce the supply of bitcoin by half. Which, all things being equal, promises a new equilibrium price above $25,000 – $30,000.
For Michael Saylor, the capitalization of bitcoin will eventually be “10 to 100 times larger” once the institutions have embraced it.
Let’s end by specifying that equaling the capitalization of gold means a 23-fold increase in the value of bitcoin. Hold!
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