Run, don’t walk, into the crypto market – that’s the message that crypto enthusiasts are spreading, and it’s not without reason. With this year’s launch of multiple spot Bitcoin ETFs heralding an unprecedented influx of mainstream investors, some are predicting that the market is just on the brink of the coming swell.
How much of a swell could we see? The investors who are attracted by ETFs control approximately $100 trillion within the global market, according to Matt Hougan of Bitwise. While we shouldn’t expect all of that to enter into the cryptocurrency market, even a 1% investment would translate into an influx of $1 trillion.
Apart from that, some experts – including Cathy Wood of Ark Invest – are recommending a 5% allocation of investments into the cryptocurrency market. That would translate into $5 trillion coming in.
Is that really possible? While it may seem somewhat fantastical, there is evidence to back it up. Back in January, spot Bitcoin ETFs saw $2 billion in transactions within the first three days of trading. That pace has continued, making BlackRock’s spot Bitcoin ETF “the fastest growing ETF in the history of ETFs,” according to BlackRock CEO Larry Fink.
In other words, the single best indicator we have of mainstream institutional-level investment is showing the best possible signs of enthusiastic adoption.
Of course, there are some that point to Bitcoin’s cycles of boom and bust and warn that this is a temporary bubble that will soon be popping. That could be the case, and anyone who has studied Bitcoin’s fluctuations should be prepared for ups and downs regardless. However, the sheer potential impact of mainstream investment funds into crypto is simply too significant to set aside.
Consider what happened when gold was finally unleashed as a spot ETF back in 2004. Prior to the launch of spot gold ETFs, the value of the gold market was between $1-2 trillion. Just a few years later, so many investors flooded into spot gold ETFs that the value soared to $16 trillion, representing an increase of at least 800%.
Year-to-date, Bitcoin prices are up by around 65% – meaning that in around three months’ time, the price has gone up that much, mostly thanks to the opening of the spot Bitcoin ETFs. If we extrapolate that figure, it equates to a gain of 260% a year – meaning that in a few years’ time, it could be on pace to see similar gains as gold following the launch of its ETFs. True, that’s a simple estimate that doesn’t account for market volatility and other factors, but as a numerical equation, the math is there.
The investors are there, too. A record number of investors – 43% of respondents – are anticipating investing in crypto this year. Importantly, 16% of those who have never owned crypto are considering getting into the market in 2024, signifying that more and more people are getting on board with crypto investments.
Fortunately, it’s even easier to get into crypto now than it’s ever been before – and for those who are looking to convert all or part of their retirement savings into crypto, you’ll receive all the tax-saving benefits as you would from a traditional IRA. Contact us today to find out how to open a digital IRA and take part in the crypto market as it continues to expand to new frontiers.
Learn more: What Are Cryptocurrency ETFs?
