The cryptocurrency world is on the edge of its seat as the anticipated approval of bitcoin spot ETFs could catapult Bitcoin’s value to an astonishing $200,000 by the end of 2025, according to Standard Chartered’s Head of FX Research, Geoff Kendrick. In a recent report, Kendrick delves into the potential impact of the Securities and Exchange Commission’s decision on these ETFs, expected by Wednesday.
Kendrick’s analysis suggests that if the ETF-related inflows occur as projected, Bitcoin could witness a staggering 344% jump from its current price of around $45,000. This leap is underpinned by the expectation that between 437,000 and 1.32 million new bitcoins will be held in US spot ETFs by the end of 2024, with inflows this year alone anticipated to be in the hefty $50 billion to $100 billion range.
The introduction of these ETFs is predicted to significantly drive up demand, potentially pushing Bitcoin to reach the $100,000 mark before 2024 concludes. Kendrick’s optimism also factors in the upcoming halving cycle and the tendency of miners to hoard tokens, which could further constrict supply.
Drawing parallels to the gold market, Kendrick recalls the impact of the first gold spot exchange-traded product, SPDR Gold Shares, which launched in 2004. Following its introduction, the value of gold steadily climbed, multiplying over fourfold within seven years. Kendrick anticipates a similar, albeit more accelerated, trajectory for Bitcoin, expecting the cryptocurrency market to mature faster than gold’s ETF market.
Additionally, Kendrick highlights a unique supply-side dynamic in the Bitcoin market. The amount of Bitcoin readily available for trade is at a historic low about the total supply in circulation, rendering the supply more price-inelastic than ever before. This scarcity, coupled with heightened demand driven by the new ETFs, sets the stage for a significant price surge.
As the crypto community and investors await the SEC’s decision, the potential for a monumental rise in Bitcoin’s value looms large, suggesting exciting times ahead for both long-standing crypto enthusiasts and new investors alike.