Bitcoin ETF: Bloomberg Analyst Cautions Against Extreme Expectations

Expectations that a spot Bitcoin Exchange Traded Fund (ETF) product will be launched are through the roof, and accompanying these expectations are projections that, if approved, the new product may welcome inflows of up to $100 billion. Top Bloomberg ETF analyst James Seyffart has come out to caution against these expectations, however, noting that such a massive volume projection may not be recorded for years.

Seyffart’s cautions came as a direct comment to the reaction of top mathematician Fred Krueger to the potential impact of a potential $100 billion inflow into Bitcoin. Krueger recalled how a $10 billion inflow in 2021 helped Bitcoin achieve its all-time high (ATH) above $69,000. He noted that with most of the top holders of BTC, like MicroStrategy, refusing to sell the coin, getting two million BTC to buy may be difficult.

This is likely an overestimation of demand in my opinion. Gold ETFs have been around since 2004 in the U.S. & currently have ~$95 billion in assets here. Spot #Bitcoin ETFs getting that much in inflows would be an EXTREME outlier success case even if measured over multiple years https://t.co/K2opcc2E9S

— James Seyffart (@JSeyff) December 12, 2023

To Seyffart, the expectations of a $100 billion inflow into the market are “extreme” especially when compared with gold, which has been around for quite some time. According to Seyffart, from 2004 to date, gold ETFs in the United States have only commanded approximately $95 billion in capital despite its wide ranging appeal to conservative investors.

The analysts posited that if Bitcoin commands the said $100 billion volume, it will undoubtedly be an outlier success case even if measured over a long time frame.

How close is Bitcoin ETF?

At the moment, there is an ongoing series of meetings with the U.S. Securities and Exchange Commission (SEC) by Bitcoin spot ETF applicants, which shows that much effort is being expended by the regulator in hopes of securing approval.

The SEC has a huge decision day ahead for the Ark Invest and 21Shares Bitcoin ETF that is due in early January. The projection is that the SEC may approve all of the spot Bitcoin ETFs at once to remove the first mover advantage for any single issuer.

With the next approval window closed, the market is keen on seeing how the SEC navigates these expectations.

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