A study from Tom Alford at TotalCrypto.io predicts a 500% increase in Bitcoin if the SEC would approve a Bitcoin ETF. There are multiple ETFs under review by the SEC, but the ETF that seems most likely to be approved is the one submitted by CBOE Global Markets.
A previous application made by the Winklevoss twins, owners of the cryptocurrency exchange Gemini, was rejected twice by the SEC who cited security concerns and investor protection among others as reasons for the dismissal. That decision was also met by some resistance from commissioners inside the SEC, a story which Toshi Times previously covered.
The difference between the rejected ETF and the one currently under review is that the ETF from CBOE Global Markets is focused on institutional investors and not retail investors. By restricting the access of retail investors by having a high barrier of entry, the chances of the ETF being approved might be higher than the previous attempts.
According to the study, the main reason behind the possible price increase of Bitcoin is that the ETF will bring many institutional investors into cryptocurrencies. Wealthy investors are also interested in cryptocurrencies – according to a report made by the consulting firm Capgemini, 29% of the millionaires surveyed expressed a high interest in cryptocurrencies.
Alford argues that since Bitcoin is so similar to gold, the same price increase would happen after the launch of the first Bitcoin ETF. However, it won’t take eight years for Bitcoin to reach its all-time high. By comparing different gold bear markets, Alford concludes that while the average bear market for gold was three years or 1095 days, the average Bitcoin bear market was just 128 days.
That would mean that Bitcoin’s market moves ten times as fast as the gold market, which would make Bitcoin able to reach an all-time high in just 300 days after the launch of the ETF. Furthermore, Bitcoins market value of $128 billion is only a fraction of the market value of gold which is valued at $7 trillion, which leaves plenty of room left to grow.
In the study, Alford also mentions several cryptocurrency analysts and prominent figures in the cryptocurrency community who thinks an increase of between 233% and 566% in the price of Bitcoin is possible by the end of 2018.
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