Discussions have ignited in the cryptocurrency world following the SFC’s approval of Bitcoin and Ethereum spot ETFs in Hong Kong, with market participants pondering over possible price increases and their resulting effects on total market value.
Historical Precedence Supports Woo’s Projection
In a recent post on X, Willy Woo, a co-founder of CMCC Crest and an industry analyst, shared his perspective on Bitcoin’s possible price trend following the anticipated adoption of an ETF in Hong Kong.
Based on Woo’s analysis, the introduction of new Bitcoin ETFs could potentially lead to price targets of $91,000 during bear markets and an astonishing $650,000 during bull markets. This could occur once investors in these ETFs have fully committed their funds, as suggested by asset managers.
Warningly, Woo notes that these forecasts don’t solely apply to the present market trend since it takes a while for investments to be completed. He remains convinced that Bitcoin’s market cap will eventually surpass gold’s, once all institutional investors have committed their funds.
According to Woo’s predictions, the approval of a bitcoin Spot ETF in the US would lead to remarkable growth in a short period. This unexpected surge in value has earned admiration from Michael Saylor.
Bitcoin Price Calculations Broken Down
Woo performed a simple estimation to provide the crypto community with a basic idea of how Bitcoin’s price could be influenced by the adoption of an ETF (Exchange Traded Fund).
Initially, the author looked at the overall capital handled by fund managers, amounting to an impressive $100 trillion. Following common advice suggesting a 2% investment in Bitcoin from firms like Fidelity, this equates to a significant $2 trillion worth of Bitcoin investments.
At present, Bitcoin has around 561 million dollars worth of investment, as indicated by on-chain data. If we include potential investments through an ETF, the total investment in Bitcoin would amount to a staggering 2.56 trillion dollars.
According to asset manager predictions, the newly launched Bitcoin ETFs could lead to significant price increases. In a bear market scenario, the price could reach as low as $91,000, while in a bull market, it may surge up to $650,000 after all investors have invested fully.
These are very conservative numbers. #Bitcoin will beat gold cap when ETFs have…
— Willy Woo (@woonomic) April 15, 2024
At various market stages, Woo employs the MVRV (Market Value to Realized Value) ratio, which calculates prospective market capitalization using the Market Value to Realized Value ratio. In bull market peaks, this ratio usually amounts to 5 times, whereas in bear market bottoms it hovers around 0.7 times.
The estimation comes out to be around $12.8 trillion and $1.8 trillion for the market capitalizations, which translates to projected prices of approximately $650,000 and $91,000 per coin respectively.
Woo points out that the given figures likely underestimate the actual amount, since factors like self-custody transfers were not taken into account and these have been quite significant recently.
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2024-04-15 18:25