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Analysts at JMP Securities have given a convincing forecast on () prices. The investment firm believes that Bitcoin price could potentially rise to $280,000 within the next three years due to expected Bitcoin ETF inflows.
This bold prediction has, as expected, sparked interest and debate about the impact of ETF inflows on Bitcoin price.
Bitcoin price is rising
Bitcoin has seen a notable rise over the last year or so, with its price rising steadily through 2023 before rising in late January and throughout February 2024. The long-awaited approval of Bitcoin Spot ETFs by the SEC in January contributed to its price rise.
At the time of writing (Wednesday, March 13, 2024, 11:45 a.m. ET), Bitcoin is trading around the $72,572 mark, up 71.35% year to date and 199% over the past 12 months corresponds. It hit a new all-time high of $73,679 at the start of Wednesday’s session.
This significant increase in Bitcoin value has once again attracted the attention of investors and financial experts and sparked discussions about the possible impact on the cryptocurrency market in the coming years.
What is Bitcoin ETF?
A Bitcoin ETF or Exchange Traded Fund is a type of mutual fund that tracks the price of Bitcoin and is traded on traditional exchanges.
Essentially, a Bitcoin ETF allows investors to access Bitcoin without having to hold the cryptocurrency directly. Instead, they can buy and sell shares of the ETF through their brokerage accounts, just like they would any other stock.
The creation of Bitcoin ETFs was a significant development for the cryptocurrency market. It is a new way for traditional investors to participate in Bitcoin’s potential profits without having to directly own and store the digital asset. Additionally, the approval of Bitcoin ETFs by regulators was seen as a step towards mainstream adoption.
Bitcoin ETF inflows forecast
Analysts at JMP Securities estimate that $220 billion will flow into spot Bitcoin ETFs over the next three years. This is a multiple of what has already been experienced.
The company was quite optimistic about the prospects of a spot Bitcoin ETF and its impact on the broader crypto market, and while they appreciate that there has already been a gradual development of exposure to the industry following the launch of the ETF is, The company argues that previous activity and flows “probably still represent the tip of the iceberg.”
“We expect inflows to actually continue to increase significantly from here over the next few years, having reached about $10 billion so far two months after launch, as ETF approval is just the start of a longer capital allocation process.” he told JMP.
“Our experience is that tracking money flow is critical to price movements over time, and when barriers to investment are removed, which in turn allows incremental inflows into an asset (or asset class), the potential price multiplier can be enormous. “
As a result, the investment firm estimates that $220 billion in additional inflows will flow into the ETF over the next three years, which it says “could also have a significant impact on the price of Bitcoin” given the multiplier on capital.
“We estimate the current multiplier to be approximately 25x, which would represent an additional increase of $280,000 per Bitcoin based on our flow estimate,” the company explained.
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