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Spot Bitcoin ETF approval could unlock $70 billion capital influx, data shows

Spot Bitcoin ETF approval could unlock $70 billion capital influx, data shows

As the cryptocurrency industry awaits a massive step toward the mainstream in the form of the United States Securities and Exchange Commission (SEC) approving a spot Bitcoin (BTC) exchange-traded fund (ETF), data shows that it could unlock over $70 billion in potential new capital influx. 

Specifically, the recent analysis by Glassnode has shown that the potential infusion of capital from different sources into this new product in the US’s $7 trillion ETF products market could total around $70.5 billion, according to its report published on November 20.

Indeed, the analysts at the cryptocurrency onchain and financial metrics platform said that these capital inflows into a spot Bitcoin ETF could stem from two key sources – stock and bond markets and the gold market – possibly receiving approximately $60.6 billion from the former and about $9.9 billion from the latter.

Furthermore, as Glassnode’s B2B contributor Marcin Miłosierny explained, “the impact of the first Spot Bitcoin ETF goes beyond the symbolic,” taking into account the “prevailing long-term HODLing pattern exacerbating Bitcoin’s scarcity” that could assist in a “potentially significant influx of new demand.”

Bitcoin supply by long-term vs. short-term holders. Source: Glassnode

Effect on price

As the report stated, such a turn of events could contribute to the positive price action of the flagship decentralized finance (DeFi) asset, along with its wider adoption as an investment product by clients who typically lean toward more traditional markets:

“This significant infusion of new capital could have a considerable impact on Bitcoin’s market, potentially driving up its price as it gains broader acceptance and becomes integrated into more traditional investment portfolios.”

On top of that, the Glassnode analysts also noted that the possibility of Bitcoin following the same price trajectory as gold did after the first spot gold ETF approval also contributed to the expectations of “a substantial increase in this asset’s price.”

Bitcoin price analysis

Meanwhile, the maiden crypto asset was at press time changing hands at the price of $37,564, up 0.22% on the day, advancing 3.21% across the previous week, and adding up to the 10.74% gain in the last month, as per the latest data obtained on November 24.

Bitcoin 30-day price chart. Source: Finbold

All things considered, the approval of a first spot Bitcoin ETF is looking increasingly more possible, particularly with the support of the SEC Commissioner Hester Peirce, who earlier said there was no reason for the regulator to stand in the way, as Finbold reported on November 23.

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