5 reasons why a spot Bitcoin ETF approval could send BTC price above $100K

There has been extensive debate about whether the launch of a spot Bitcoin (BTC) exchange-traded fund (ETF) will lead to a price correction after the initial excitement from investors subsides. While some arguments hold merit, they overlook the broader perspective. The approval of a spot Bitcoin ETF will be a game-changer in various aspects, including volatility, correlation with traditional finance assets and market liquidity.

Spot Bitcoin ETF prospects. Source: Eric Balchunas/Bloomberg

Arbitrage desks and the ETF providers have likely created a buffer to support the initial demand and prevent market front-running. Nevertheless, whether it takes a few hours or several months, this buffer will eventually deplete. When examining a longer time frame—months instead of days—the price of Bitcoin is determined by the balance between immediate demand and the supply of coins at a specific price level.

Bitcoin is validated, boomers enter the market, and issuers compete for dominance

The initial question to consider is why someone would wait until Bitcoin’s price surpasses its all-time high to start investing. Most individuals are either lazy or cautious, meaning they are hesitant to open an exchange account or invest in anything that hasn’t received their broker’s endorsement. Even if Grayscale offers Bitcoin-backed trust funds, there is little incentive for traditional investment brokers to offer such products.

It’s important to note that the median retirement savings for North Americans under 34 is $17,600, while those between 35 and 64 have accumulated a substantial $142,100, according to Vanguard. This data suggests that millennials and Generation Z are not the ones who will propel Bitcoin’s price to $100,000 and beyond. In essence, the first reason the spot Bitcoin ETF is crucial lies in the minimal effort required for baby boomers to invest.

More significantly, by offering products where the asset manager retains the management fee, the incentives for providing the product increase significantly. This means that sales teams at BlackRock, Fidelity, Ark Invest, Bi

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Author: Marcel Pechman

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