Bitcoin’s price might catch a serious wave from a brand new ETF, according to an analyst at Fundstrat.
Fundstrat’s team, which had published a yearly-end bitcoin target of $100,000, now states that bitcoin’s equilibrium price might spike up to $168,000 if the ProShares ETF that started trading this Tuesday gets a serious boost of inflows from hungry investors.
Fundstrat is now predicting the new bitcoin-based ETF will give higher first-year inflows than even what the Invesco QQQ Trust ETF brought in during 2002 by watching the Nasdaq.
“This bitcoin ETF will allow vastly more people to invest in crypto,” the co-founder of Fundstrat Global Advisors, Tom Lee, said. “We believe Bitcoin demand will go beyond the inflows for QQQ.”
Gary Gensler, the SEC Chair, has reiterated his acceptance of an ETF connected to bitcoin futures (compared to one based on spot bitcoin). And Fundstrat’s thesis is especially bullish about the enthusiasm for a new fund which is settled in bitcoin futures.
Today, investors can already buy and hold bitcoin through exchanges such as Coinbase and others, though Lee said how the new ETF might bring in more demand.
He mentioned the Invesco QQQ ETF, which gave diversification among top tech companies. The fund saw inflows of $36 billion in the ETF’s initial year.
Fundstrat is predicting that ProShares bitcoin ETF will go beyond that by attracting in $50 billion during its first year, which would mean around $50 million more in demand for the top cryptocurrency per day. That, combined with the prices for bitcoin right now, got Fundstrat to give equilibrium price of up to $168,000 per coin.
Analysts will have a reference to work with concerning what successful inflows could look like. The SPDR Gold Shares fund has the fastest increase to $1 billion under management — doing this in only three days.
Lee further said the idea that bitcoin’s eight-year long wait for an ETF was not already priced in.
“There are probably some who think the boost in the price is already discounting approval,” Lee said. “To an extent, this might be true, since Bitcoin has gone to almost all-time highs in the previous few weeks. But in our view, the value of Bitcoin will keep rising, well after real approval of the ETF.”
Author: Scott Dowdy