Spot Bitcoin exchange-traded funds (ETFs) could see a massive influx of $220 billion over the next three years, potentially driving Bitcoin’s price up to $280,000, according to a research report by broker JMP Securities. The report suggests that if this estimated capital inflow materializes, it could significantly impact the cryptocurrency market.
JMP analysts pointed out that such substantial inflows into ETFs could be advantageous for crypto exchange Coinbase (COIN). Consequently, the broker raised its price target for Coinbase stock to $300 from $220, maintaining a market outperform rating. Currently, Coinbase shares are trading higher at $262.92, up 2.6%.
Despite already exceeding expectations with $10 billion in inflows just two months after their launch, JMP believes that spot Bitcoin ETFs are just scratching the surface. The analysts anticipate a significant increase in flows, projecting $220 billion in incremental inflows over the next three years.
The analysts, led by Devin Ryan, explained that if their estimates hold true, and considering the current capital multiplier, this could result in a substantial increase in Bitcoin’s market capitalization, reaching $5.5 trillion and equating to $280,000 per Bitcoin.
On a remarkable note, spot Bitcoin ETFs experienced a daily record of net inflows of 14,706 Bitcoins, valued at over $1 billion, setting a new high since the inception of Bitcoin spot ETF trading.
Separately, JPMorgan conducted an analysis suggesting that the Bitcoin spot ETF market could grow to around $62 billion within the next two to three years, according to a report released by the bank.
Bitcoin ETFs have witnessed unprecedented success, accumulating over 30,000 BTC in the previous week alone and holding close to $30 billion. This success has led to predictions of a potential liquidity crisis for Bitcoin ETFs in the future, where the demand for Bitcoin could surpass its available supply.
According to Ki Young Ju, CEO of CryptoQuant, ongoing institutional inflows into Bitcoin could lead to a situation where the demand for Bitcoin exceeds its supply, potentially resulting in a liquidity crisis for Bitcoin ETFs. This scenario could limit the availability of sellers and result in a thinner order book, ultimately leading to a higher cyclical peak for the cryptocurrency.
