K33 Research, a leading crypto analysis firm, has unveiled a striking disparity between the market’s valuation and the potential impact of U.S. spot Bitcoin ETFs in a revelation that could reshape the cryptocurrency landscape. The research firm asserted that the current market sentiment is overlooking a substantial surge in buying pressure.
According to K33 Senior Analyst Vetle Lunde and Vice President Anders Helseth, “prices should have gone up” in the latest report, but it’s currently a buyer’s market. The approval of a spot Bitcoin ETF is anticipated to trigger an “enormous” influx of funds, exerting considerable upward pressure on Bitcoin prices. Conversely, a rejection would likely maintain the status quo.
K33’s Senior Analyst expanded on this perspective in a tweet, stating:
The market is wrong – and dramatically underestimates the impact of U.S. BTC ETFs (and ETH futures-based ETFs).
Several compelling factors reinforce this outlook. The odds for U.S. spot ETF approval are reported to be at an all-time high. Additionally, Bitcoin is trading at levels reminiscent of the period before the BlackRock announcement.
Anticipation is mounting for a potential wave of U.S. ETF launches, should they gain approval. The analysts anticipate that these concurrent launches would lead to an influx even stronger than the initial trading days of both BITO and Purpose.
Over the past four years, there has been a significant correlation between robust inflows into investment vehicles for BTC and an increase in BTC prices. The excess leverage in the market, particularly on August 17, was completely cleared.
Canada’s experience with purpose provides a valuable benchmark. Purpose attracted inflows of 11,141 BTC, with subsequent ETF launches accumulating a staggering 58,000 BTC within the initial four months. Notably, the U.S. market presents a far larger addressable audience.
BITO, launched without formidable competition, garnered inflows of 19,425 BTC within its first ten trading days. This first-mover advantage, combined with the superiority of U.S. spot ETFs over futures-based alternatives, further solidifies expectations of heightened spot ETF inflows in the U.S.
A graphic representation underscores the symbiotic relationship between BTC’s rolling 30-day returns and the influx into BTC investment vehicles. This chart is a testament to the correlation between robust net inflows and a strengthening market.
Statistical data cements this narrative. During monthly positive flows exceeding 20,000, BTC’s 30-day return averaged an impressive 23.6% from 2020 to 2023. Conversely, when 30-day monthly inflows recorded negatives, BTC saw an average return of -4%.
