Galaxy Digital, a crypto investment firm, has released the findings of its latest study. As per Galaxy Digital, if spot Bitcoin ETFs in the process of getting acceptance within the US are approved, they can bring at minimum $14.4 billion in market value within the first year of issue. Galaxy Digital claims that ETFs are a good investment option.
ETF may be a more beneficial investment option than investments like trusts and futures contracts which are currently available to investors, and have the value of $21 billion. Based on the cryptocurrency investment company the market entry rate could rise to $27 billion by the second year and to $39 billion by the end of the third year following the acceptance of the spot ETFs.
In a written note to the study it was said in the note that “the US asset management industry has the highest access to the net, and is the most accessible and direct market in the event that the market-wide spot Bitcoin ETF is approved. In October 2023, the assets total under control of brokers-dealers ($27 trillion) and banks ($11 trillion) along with RIOs ($9 trillion) was $48.3 trillion.”
Spot Bitcoin ETFs could be able for attracting investments in Bitcoin by offering a strict network of partners, which includes traditional funds as well as banks which provide strong security and a long history of providing high investment rates.
It is anticipated for demand for ETFs that are spot, which is beyond the expectations of investors. Indeed, the price of Bitcoin has increased by more than 10% in just a few hours this week, signalling that investors have high expectations after the announcement of BlackRock’s ETF application was accepted.
Additionally, the fact that the BlackRock iShares Bitcoin Trust with the IBTC code was included in the DTCC and that the price of the most popular cryptocurrency increased by more than 12 percent on October 23 is a further confirmation of the high expectations.
Expectation of a 74% Surge in Bitcoin in the First Year
Furthermore, Galaxy Digital added that considering the price and liquidity impact of billions of dollars worth of investments, market entry could be a factor in an increase of 74% in the value of BTC in the initial year.
According to the firm that invests in crypto that currently offers investment products, they are not suitable for investors due to their disadvantages with high costs in addition to low liquidity and tracking mistakes as well as the fact that the investment options are not accessible to a vast investor base which holds a large portion of the global wealth.
However the place Bitcoin ETF stands out as the most appropriate investment vehicle for investors who wish the ability to directly invest in BTC without the need to own and manage BTC via self-custody.
In its research paper, Galaxy Digital stated, “A spot Bitcoin ETF will provide greater efficiency by reducing fees in addition to liquidity and price monitoring. Although fees have not yet been revealed by applicants of Bitcoin ETFs, ETFs typically provide lower fees when compared to closed-end or hedge funds.” and further added “The the number of ETF applicants will cause fees to be kept low to compete.”
At present, there are Twelve spot Bitcoin ETFs waiting approval by the SEC. The companies that have submitted applications to create their own ETFs are Grayscale, 21Shares & Ark, BlackRock, Bitwise, VanEck, WisdomTree, Invesco, Galaxy, Fidelity, Valkyrie, Global X, Hashdex and Franklin.