Bitcoin ETF Approval Sets Stage for Massive $24-50bn Fiat Rush 💥
Helping EVERYONE to make better crypto investment decisions.
Many have been asking, so for the next 30 days, for new yearly subscribers of our substack updates, we will send a copy of the book ‘Crypto Titans: How trillions were made and billions lost in the cryptocurrency markets” to their postal address (no extra shipping and handling fees).
👇 1) Our 2023 outlook report, published on December 9, 2022, boldly projected a substantial crypto rally driven by lower US inflation and favorable macroeconomic conditions. This foresight not only anticipated strong rebounds for Bitcoin and Ethereum but also predicted a significant drop in volatility.
👇 2) GBTC (Grayscale Investments’ Bitcoin Trust) share prices have remarkably surged by 167% year-to-date, significantly outperforming Bitcoin’s 71% growth. At the year’s outset, GBTC’s net-asset-value (NAV) discount was -45%, slightly narrowing to -43%.
👇 3) However, the game-changer came when BlackRock announced its ETF application on June 15, 2023. Our earlier reports analyzed the 15,000-strong US registered investor advisor (RIA) community overseeing around $5 trillion. This group holds immense potential, and even a modest 1% allocation recommendation for Bitcoin would usher in around $50 billion in inflows.
👇 4 )Drawing a parallel with precious metals ETFs, estimated at approximately $120 billion in market cap, and assuming that between 10-20% of precious metal ETF investors look at a Bitcoin ETF to diversify their monetary debasement and inflation hedges, we could witness a sizeable $12-24 billion worth of inflows into the Bitcoin ETF.
👇 5) Let’s explore the potential impact of the BlackRock Bitcoin ETF’s approval. If Tether’s market cap increases by $24 billion, acting as a proxy for likely ETF inflows, Bitcoin’s price would rise to $42,000, representing a conservative estimate. With a more significant influx of $50 billion (1% allocation from RIAs), Bitcoin could potentially rally to $56,000.
👇 6) Utilizing our Black-Litterman Asset Allocation model, which constructs an optimized portfolio based on a client’s desired portfolio volatility, we find that investors could allocate approximately 10.6% into Bitcoin to diversify their portfolios. While we don’t expect the average investor to commit such a significant proportion to Bitcoin, RIAs could reasonably recommend a 1% allocation of $50 billion in inflows.
👇 7) Consider the Bitcoin call option with an expiration date at the end of October 2023 and a strike price of $28,000. It was valued at $250 last Friday, but its price surged to as much as $2,500 on Monday, driven by a rumor about the approval of the BlackRock Bitcoin ETF. This represents a 10x return, which is truly remarkable.
👇 8) Crypto traders and everybody else can use these quieter days to get some reading done and learn about the crypto industry's history. This will help in understanding where the industry will go. We suggest the book "Crypto Titans: How trillions were made and billions lost in the cryptocurrency markets"
