The post To gauge impact of bitcoin spot ETF, analysts look to gold appeared on BitcoinEthereumNews.com.

With optimism around eventual spot bitcoin ETF approval ramping up, the exact impact such a product will have is hard to pinpoint.  But the impact gold ETFs had on the products’ underlying asset could foreshadow the effect of yet-to-be-seen bitcoin fund launches, some industry executives say. Bitcoin ETFs could see $14.4 billion of inflows in their first year of trading, according to a Tuesday report by Galaxy Digital research associate Charles Yu. The price of bitcoin could increase by 74% in the 12 months following approval, he added.  Yu’s flow estimate comes from an assumption that BTC is adopted by 10% of total assets across three wealth management channels, with an average allocation of 1%. Assets managed by brokers-dealers, banks and registered investment advisers (RIAs) total roughly $48 trillion, according to the report. The Galaxy research associate then looked to the gold market as a point of comparison to determine the impact of bitcoin ETFs on BTC’s price. Read more: AllianceBernstein calls bitcoin a ‘safe haven asset,’ more attractive than gold The price of gold has roughly quadrupled since State Street Global Advisors launched the SPDR Gold Trust (GLD) in November 2004.  Gold ETFs held $198bn in assets under management, as of Sept. 30 — representing about 1.7% of the gold supply, according to World Gold Council data. The value of bitcoin held in investment products amounted to $21.7 billion at that time, or roughly 4.3% of total issued supply. “With gold having an estimated ~24x larger market capitalization and 36% less supply held in investment vehicles compared to bitcoin, we assume a dollar-equivalent amount of fund inflows having a ~8.8x greater impact on bitcoin markets compared to gold markets,” according to Yu. By applying the year-one estimate of bitcoin ETF inflows into the historical relationship between gold ETF fund…

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Filed under: News - @ October 26, 2023 3:16 am