K33 research analyst believes that a spot Bitcoin ETF could lead to major inflows pushing the Bitcoin price above $42,000 in the first 100 days.
The analyst also added that the spot Bitcoin ETFs could trigger major outflows from the futures-based ETFs.
The world’s largest cryptocurrency Bitcoin (BTC) continues to face selling pressure and is trading under its crucial support of $26,000. While Bitcoin shows no clear signs of price recovery ahead, some market analyst have continued to pin their hopes on the spot Bitcoin ETF approval.
Vetle Lunde, a seasoned analyst at K33 Research, shared his predictions that the arrival of the spot Bitcoin ETF would catalyze the Bitcoin bull run. The analyst at K33 Research believes that the green light for the spot Bitcoin ETF would catalyze a 66% bull rally.
The Bitcoin price could shoot to $42,000 in the first 100 days as soon as the US SEC greenlights the spot Bitcoin ETF. The report by K33 Research emphasizes that the market might be underestimating the significant impact that the approval of a spot Bitcoin ETF in the US could have on the cryptocurrency market. Historical data demonstrates a strong correlation between substantial inflows and increased upward momentum. Commenting on this development, Lunde stated:
“The market is wrong – and dramatically underestimates the impact of US BTC ETFs (and ETH futures-based ETFs)… Odds for US spot ETF approval have never been better… I expect stronger inflows than both BITO and Purpose managed in their first trading days… The past four years have seen a strong relationship between strong BTC investment vehicle inflows and appreciating BTC prices”.
Spot Bitcoin ETFs Could Lead to Massive Inflows
Lunde believes that if the US Securities and Exchange Commission (SEC) approves spot Bitcoin ETFs, it will pave the way for a substantial capital injection. He predicts that as many as 100,000 BTC could flow into Bitcoin investment options, both within the US and internationally, over a span of four months.
Drawing attention to the Canadian experience, Lunde pointed out that Canada’s Purpose Bitcoin ETF alone amassed an impressive 11,141 BTC. When combined with other Canadian ETFs, the total reached 58,000 BTC within the first four months after their launch.
The analysts also stressed the broader market scope that the US has to offer in comparison to Canada. Thus, the launch of the spot Bitcoin ETFs in the United States would have an even more pronounced impact. Lunde added:
“BITO saw inflows of 19,425 BTC in their first ten trading days. BITO launched without serious competition, securing a considerable first-mover advantage. Further, US futures-based ETFs are inferior to direct spot-based exposure due to rolling costs. This leads me to expect heightened spot ETF inflows in the US compared to BITO”.
Another report from Bloomberg Intelligence estimates that a spot Bitcoin ETF could come with a $100 billion promise. The report also states that once the spot ETFs come to the market, they could pose an existential threat to the futures-based ETFs as well.
K33’s Vetle Lunde added: “The BTC-futures ETFs will probably experience significant outflows if spot-based ETFs are approved. They are far less straightforward in addition to incurring higher costs due to rolling, thus leading to underperformance over time.”
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