CoinShares Analyst Predicts BTC Price to Reach $81,000 Amid Bitcoin Spot ETF Speculations
In a recent analysis, James Butterfill, the Head of Research at CoinShares, explores the potential impact of a U.S. Bitcoin Spot ETF on BTC prices and predicts a potential rally. Based on fund flow data on the X platform, Butterfill suggests that Bitcoin could reach $81,000, sparking speculation among crypto enthusiasts.
The anticipation of Bitcoin Spot ETF approval has triggered a rally in the broader digital asset space. Market pundits believe that the approval could inject billions of dollars into the BTC market. Let’s take a closer look at how much inflow could trigger a significant rally in the BTC price.
James Butterfill’s Analysis Using Fund Flows Data
In a recent blog post, James Butterfill from CoinShares explores the relationship between Bitcoin prices and Exchange-Traded Products (ETP) fund flows. Based on historical data, Butterfill highlights the coexistence of rising prices and increased inflows, indicating a momentum-driven approach among ETP investors. The analysis also identifies times of market struggle, which affect ETP trading based on sentiment.
Using a quantitative approach, Butterfill introduces a predictive model that correlates 45-day price changes and weekly flows as a percentage of AuM. The model suggests a potential surge to $141,000 per Bitcoin with an estimated $14.4 billion in inflows.
However, Butterfill acknowledges the difficulty in precisely gauging future inflows and presents a matrix of varied inflow scenarios and their potential impact on Bitcoin prices. As the prospect of a Bitcoin Spot ETF in the U.S. looms, Butterfill suggests that a $2.5 billion inflow could drive BTC prices to $54,000, while a $6.2 billion inflow might push prices up to $81,000.
The Bitcoin price was down 1.21% over the last 24 hours and traded at $36,467.12 on November 17. The recent decline in BTC price is attributed to a sell-off in the broader market following BlackRock’s official filing for a Spot Ethereum ETF with the SEC. Despite the recent decline, Bitcoin has gained over 29% in the last seven days, reflecting the bullish sentiment in the market.
Butterfill notes the potential diversification benefits and enhanced sharpe ratios a Bitcoin ETF could offer. However, he also highlights the slow process of regulatory approval and corporate acceptance. The perceived complexity of Bitcoin may result in a gradual process of corporations and funds building knowledge and confidence before entering the market.
Considering these factors, Butterfill anticipates a significant demand for Bitcoin once a spot-based ETF is launched. However, the surge in Bitcoin prices will depend on overcoming regulatory hurdles and dispelling the perceived complexity surrounding Bitcoin as an investment asset.
Please note that the presented content may include the personal opinion of the author and is subject to market conditions. It is important to conduct your own research before investing in cryptocurrencies, and neither the author nor the publication holds any responsibility for personal financial loss.