Galaxy forecasts Bitcoin price to rise 74 percent in the first year following its ETF debut

By: Dickson Arinze

Galaxy forecasts Bitcoin price to rise 74 percent in the first year following its ETF debut

October 25, 2023 7:00 AM

Even without "second-order effects," Galaxy Digital predicts that Bitcoin will rise to nearly $59,000 with a 74% increase.


Galaxy Digital, a cryptocurrency investing firm, predicts that the price of Bitcoin (BTC) will climb by 74.1% in the first year following the debut of spot Bitcoin exchange-traded funds (ETFs) in the United States.


In a blog post published on October 24th, Charles Yu, a research associate at Galaxy Digital, predicted that the Bitcoin ETF market would be worth $14.4 trillion in its first year of operation. Using gold ETFs as a benchmark, he calculated that 74% of investors would lose money if they bought Bitcoin ETFs instead.


Yu forecasts a 6.2% increase in Bitcoin's price in the first month after an ETF launch, then a gradual decline to a 3.7% increase in the 12th month.




Estimated monthly spot Bitcoin ETF inflows and price impact over one year.
Source: Galaxy Digital Research


Yu utilized September 30 Bitcoin price data, but if Bitcoin's price were to climb by its current 74.1%, it would be worth $59,200.


If BlackRock's proposal for a spot Bitcoin ETF is accepted, the price of Bitcoin might jump to between $42,000 and $56,000, as estimated by Markus Thielen, head of research at digital asset financial services firm Matrixport, in a post dated October 19.


Yu estimates that the total addressable market for Bitcoin ETFs in the United States will grow to $26.5 trillion in the second year following their debut and $39.6 trillion in the third.

 

Projections for the first three years of the spot Bitcoin ETF market's 
size and inflows. Source:Galaxy Digital Research


Yu admitted that if spot Bitcoin ETFs were delayed or denied, it would affect the price projection.


Even so, he emphasized that these projections were modest and failed to account for the "second-order effects" of a sudden Bitcoin ETF acceptance.


We anticipate that additional global and international markets will follow the U.S. in authorizing + offering comparable Bitcoin ETF products to a bigger community of investors in the near future," Yu stated.


In April 2024, Bitcoin will double in value, and there is a chance that rates have peaked or will peak soon, he continued, stating that "2024 could be a big year for Bitcoin."