Will the Truth about Bitcoin ETFs’ Future be Revealed: Will They Soar or Plummet?
Bitcoin ETF: A Different Perspective on the Impact and Price Predictions
The cryptocurrency world is abuzz with expectations of a bullish turn for Bitcoin in 2024 within the U.S. market. One of the main reasons behind this optimism is the potential approval of spot Bitcoin ETFs by January 2024. However, Anthony Pompliano, a renowned figure in the crypto industry, recently presented a differing viewpoint, sparking discussions among enthusiasts and investors.
In a detailed post, Pompliano carefully analyzed the potential impact of a Bitcoin spot ETF on the market. Contrary to the common bullish sentiment, he argues that an influx of tens of billions of dollars would only result in a modest 12% price increase, considering Bitcoin’s current market valuation of $850 billion. However, he emphasizes that this calculation does not provide the full picture.
Pompliano delves deeper into the liquidity issue, highlighting that around 70% of all Bitcoin has remained static for over a year. Taking this liquidity crunch into account, he suggests that a $100 billion influx would represent a staggering 40% rise in Bitcoin’s liquid market capitalization, which currently stands at approximately $255 billion.
While acknowledging the growth potential, Pompliano maintains a cautious stance. He believes that even with significant ETF inflows, Bitcoin’s price is unlikely to reach its historical peak of $69,000. Instead, he points out other factors that could influence Bitcoin’s trajectory, such as the anticipated supply halving in early Q2 and potential shifts in central bank policies, particularly by the Federal Reserve. According to Pompliano, these elements could lead to a speculative rise in the value of assets like Bitcoin.
In conclusion, Pompliano refrains from providing a specific price forecast but anticipates a significant upswing in Bitcoin’s value during the upcoming bull market. He recognizes the complexity of investment predictions and emphasizes the inherent challenges in forecasting the future of a volatile asset like Bitcoin. Ultimately, he highlights Bitcoin’s enduring appeal and the continuous blockchain transactions as the cryptocurrency’s most reliable aspects.