Glassnode: Bitcoin ETF Expected to Generate $70B in New Demand
Unmet Investor Demand for a Spot Bitcoin ETF
According to a recent report by on-chain data firm Glassnode, there is substantial unmet demand from investors for a spot Bitcoin exchange-traded fund (ETF). Glassnode projects that up to $70 billion in new capital could flow into the Bitcoin market after the approval of a spot Bitcoin ETF. This estimate is based on the assumption that 10% of the money currently invested in major stock and bond ETFs would shift to a Bitcoin ETF, along with 5% of capital allocated to gold ETFs.
Diminishing Bitcoin Supply and Potential Market Volatility
The report points to a diminishing Bitcoin supply available for trading to meet this potential demand surge. Glassnode’s data shows that the percentage of the Bitcoin supply held by short-term investors recently hit multi-year lows. Meanwhile, the share of Bitcoin held by long-term investors reached all-time highs above 76% in October. “The scarcity of readily tradable Bitcoin may amplify market volatility and price movements in response to the influx of ETF-driven capital,” the Glassnode report concludes.
Impact of U.S. Regulator Approval and Historical Comparison to Gold ETF
U.S. regulators have yet to approve a spot Bitcoin ETF, but its approval could significantly expand access and demand for Bitcoin from institutional investors. Glassnode suggests a spot Bitcoin ETF could have impacts comparable to the first U.S. gold ETF launched in 2003. In the decade that followed, gold prices rose over 400% amid greater investment demand.
In conclusion, Glassnode’s report highlights the potential for a spot Bitcoin ETF to unlock $70 billion in new demand from investors. The data firm also underscores the impact this could have on the Bitcoin market, particularly in terms of supply dynamics and potential market volatility. Furthermore, the comparison to the historical impact of a gold ETF launch in the U.S. provides insight into the potential long-term effects of a Bitcoin ETF approval. As the discussion around a spot Bitcoin ETF continues, market participants and regulators alike will likely monitor these developments closely.
I have been a full-time professional writer for over 10 years, and have written for some of the biggest publications in the world. My work revolves around cryptocurrencies and blockchain technology, and I am widely considered to be one of the leading experts in these fields.I have written two books on the subject matter, and my articles have been featured in major news outlets such as The Wall Street Journal, Forbes, and Huffington Post. In addition to writing, I also give talks and seminars on cryptocurrency investing, and am a regular commentator on CNBC, Bloomberg, and other financial news networks.
