The cryptocurrency community is abuzz with excitement as they eagerly await the potential approval of a Bitcoin exchange-traded fund (ETF), speculating about its potential impact on BTC prices.
Supporters are confident that the approval of a Bitcoin ETF would spark widespread institutional adoption of the cryptocurrency, resulting in enhanced liquidity and greater market participation. They believe that this surge in interest could propel Bitcoin, the world’s leading cryptocurrency, to unprecedented levels of success.
Notable cryptocurrency market trader Ash Crypto recently discussed the potential price implications of a spot Bitcoin ETF approval. Drawing parallels from history, the analyst examined the response of gold prices when the first gold ETF was approved in the United States back in 2004.
How High Will Bitcoin Go If It Follows Gold’s Lead?
On July 12, Ash Crypto took to Twitter to share an intriguing chart depicting the price movement of gold before and after the introduction of the first ETF for the precious metal, nearly two decades ago.
Remarkably, during the period from 2004 to 2011, the value of gold experienced a staggering surge of nearly 350%. Starting at approximately $450, the price of gold skyrocketed to over $1,820 in August 2011, showcasing a remarkable increase of 346%.
According to the market expert, if a spot Bitcoin ETF receives approval from US authorities and follows a similar trajectory as gold, experiencing a 346% surge, it would propel the leading cryptocurrency to an astonishing value of $138,000.
“So if #Bitcoin ETF gets approved at $30,000, copying gold’s 346% return after its first ETF approval in 2004 BTC price at a return of 346% would be at $138,000.” – Ash Crypto wrote.
In the event of approval, this would mark the inaugural introduction of a spot Bitcoin ETF for US investors. It is crucial to emphasize that a spot Bitcoin ETF differs from a Bitcoin futures ETF, highlighting the distinction between the two investment instruments.
Specifically, the former pertains to an investment vehicle that would grant investors direct exposure to the cryptocurrency itself, enabling them to hold the actual asset. In contrast, the latter derives its value from Bitcoin futures contracts, rather than directly holding the underlying digital asset.
Will A Bitcoin ETF Be Approved?
On June 15, the renowned asset management giant BlackRock (NYSE: BLK) submitted a filing to launch a spot Bitcoin exchange-traded fund (ETF). Subsequently, several other prominent players in traditional finance, such as Invesco, Valkyrie, and Fidelity Investments, among others, followed suit in the ensuing weeks.
Nevertheless, the US Securities and Exchange Commission (SEC) expressed concerns regarding the adequacy and clarity of BlackRock’s application, leading them to deem it insufficient. In response, BlackRock took note of the regulator’s comments and made the necessary adjustments before resubmitting the application.
Buy Bitcoin NowThe approval of a spot Bitcoin ETF remains uncertain, yet there are indications that major equity funds anticipate a positive decision from US regulators. Crypto investor Andrew Kang underscores this sentiment by noting the outperformance of Bitcoin-related stocks compared to BTC itself.
“Bitcoin-related equity outperformance vs BTC is an indication of big equity funds placing high expectations on $BTC ETF approval. These guys have seen dozens of ETFs approved during their careers.” – Kang noted.
Kang pointed out that crypto investors seem to be undervaluing both the likelihood of spot BTC ETF approval and the potential timeline associated with it.
