Spot Bitcoin ETFs Projected to Garner 14 Billion Dollars Inflows in Their Inaugural Year, According to Report

Crypto News- Spot Bitcoin ETFs Projected: As the launch of a spot Bitcoin ETF looms on the horizon, market participants are abuzz with anticipation, engaged in fervent speculations about the potential impact it could have. A recent report from Galaxy Research has boldly asserted that the inaugural year of a Bitcoin ETF’s introduction may see a substantial influx of capital, to the tune of $14 billion.

Spot Bitcoin ETFs Projected to Garner 14 Billion Dollars Inflows in Their Inaugural Year, According to Report

In their endeavor to estimate the influx of capital into the Bitcoin ETF, Galaxy Research has strategically pinpointed the wealth management industry in the United States as the most accessible and direct market for such an ETF, provided it secures regulatory approval. As of October 2023, the collective assets under management by broker-dealers, banks, and Registered Investment Advisors (RIAs) in the U.S. amounted to an impressive $48.3 trillion.

Galaxy Research’s in-depth analysis designates this $48.3 trillion as the Total Addressable Market (TAM) benchmark, focusing primarily on selected US wealth management aggregators. It is worth noting that the scope of addressable markets and the indirect ramifications of a Bitcoin ETF’s approval are anticipated to extend beyond the confines of the U.S. wealth management sector, potentially reaching international markets, retail investors, other investment vehicles, and diverse distribution channels. This broader reach could pave the way for a significantly larger capital influx into Bitcoin spot markets and investment products, as per the insights offered by Galaxy Research.

Crucial Assumptions for Estimating Capital Inflows:

Galaxy Research’s assumptions come into play, with a 50% adoption rate expected for the RIA channel in the initial year, gradually escalating to 100% over the course of three years. As for broker-dealers and banks, a more gradual adoption rate is envisioned, commencing at 25% in the first year and steadily increasing to 75% by the third year. Building upon these foundational assumptions, they posit that the potential market size for a US Bitcoin ETF would start at approximately $14 trillion in its inaugural year, surge to around $26 trillion in the second year, and eventually reach $39 trillion by the third year.

In projecting capital inflows into Bitcoin ETFs, they anticipate that Bitcoin will be embraced by 10% of the total assets within each wealth channel, with an average allocation of 1%. Based on these carefully calculated projections, Galaxy Research forecasts initial capital inflows of approximately $14 billion into a Bitcoin ETF in the first year post-launch, with this figure surging to about $27 billion in the second year and a substantial $39 billion in the third year following the ETF’s introduction.

Amidst these significant developments, it’s worth noting that BlackRock has taken a pivotal step by transferring its iShares Bitcoin ETF filing to the DTCC platform. Simultaneously, the U.S. courts have directed the Securities and Exchange Commission (SEC) to conduct a thorough review of Grayscale’s spot Bitcoin ETF filing.