Bitcoin's price could catch a serious boost from a new ETF, according to analysts at Fundstrat.
Fundstrat is predicting the new bitcoin futures ETF will deliver higher inflows than what the Invesco QQQ Trust Series 1 fund ETF was able to attract back in 2002 by tracking the Nasdaq 100 Index.
T he new bitcoin fund will allow vastly more individuals to allocate to crypto, Fundstrat Global Advisors co-founder Tom Lee wrote. We think Bitcoin demand will exceed the QQQ inflows. In Yahoo Finance Live this week Sean Farrell will appear for an interview with Fundstrat's Head of Digital Asset Strategy at 11 a.m. EST!
Market research Board Chair Gary Gensler has repeated signaled his openness to an ETF using bitcoin futures as opposed to a contract on spot Bitcoin Fundstrat's thesis is particularly bullish on investor enthusiasm for a fund settled in bitcoin futures.
Investors have the option of buying and holding bitcoin themselves over exchanges like Coinbase and others, although Lee explained how a new ETF can bring more demand.
He cited the Invesco QQQ ETF, which had featured diversification among the top tech names at a time when investors already had the ability to invest in tech stocks, saw inflows of $36 billion in the ETF's first year.
Fundstrat is predicting that the ProShares ETF will surpass it by bringing in $50 billion in its first year, which would imply roughly $50 million additional demand for Bitcoin per day. What, combined with current supply prices for Bitcoin, boosted the Fundstrat to an equilibrium price of $168,000 per bitcoin.
Analysts will have some frame of reference to work with for what successful inflows might look like. According to Bloomberg Intelligence, the SPDR Gold Shares fund GLD made the fastest climb to $1 billion in assets under management — doing so in three days.
Lee further asserted that bitcoin's eight-year wait for an ETF has not yet been priced in.
There are some opinions that the run up in Bitcoin's price is already discounting this approval, Lee wrote. To an extent, this is probably true, as Bitcoin has been hitting near all time highs in the past few weeks. In our view, but the price of bitcoin will continue to rise, well after actual approval of the ETF. The ProShares bitcoin ETF is expected to start trading at NYSE with the ticker BITO.