Gold Prices Rallied 250% After First ETF Approval, Is Bitcoin (BTC) Price Next?

Bitcoin Price Insights:

• Trading at $34,500 as of October 30, Bitcoin’s (BTC) price is now up 110% in 2023 so far. 
• The potential approval of a Bitcoin-denominated Spot Exchange Traded Funds (ETF) has been one of the major driving factors behind BTC’s bullish H2 2023 performance. 
• Historical price data shows that Bitcoin looks set to mirror the XAU price action after the first GOLD ETF was approved for trading in the US markets in 2004. 

Bitcoin’s (BTC) price is now up 110% in 2023 so far. The potential approval of a Bitcoin-denominated Spot Exchange Traded Funds (ETFs) has emerged the major factor behind the latest price rally in H2 2023. 

Historical analysis of Gold’s (XAU) price action in the years that followed the first Gold ETF approval provides a positive outlook for BTC. Can Bitcoin price rise another 200% to reach new all-time high after Spot Bitcoin ETF are approved for trading on stock exchange platforms? 

XAU/USD Prices Increased By 250% in s After First GOLD ETF Was Approved

Spot Bitcoin ETF applications filed by major hedge funds and trillion dollar insituitons like Blackrock and Grayscale have fuelled expectations for Bitcoin prices to hit a new all-time high.

To validate these expectations, crypto market analysts have been looking back as far as November 2004 first spot gold ETF, the SPDR Gold Shares, was approved for listing on the New York Stock Exchange. 

The Gold ETF effectively allowed investors to gain direct exposure to the commodity without having to purchase a physical gold bar. The chart below illustrates how Gold prices reacted to the SPDR Gold Shares ETF listing. 

According the chart above, the price of Gold (XAU) was $700 when SPDR Gold Shares rolled out the first Gold ETF ($GLD) in November 2004. Notably, by August 2011, the price of Gold had skyrocketed 254% to reach a new all-time high of $2,450.

However, considering that Gold is far less volatile than BTC, investors anticipate that similar levels of capital inflows into Bitcoin markets could produce an exponential price action compared to Gold in mid-2000’s. 

How Will Bitcoin Price React to Spot ETF Approval?

In simple terms, an Exchange-Traded Fund (ETF) is a financial instrument that tracks the price of an asset and allows traders to gain exposure to it without directly holding custody of the asset. 

Subject to approval, Bitcoin Spot ETF applications filled by the likes of Blackrock and Grayscale will effectively allow BTC to be traded on traditional stock exchanges among existing shares and index funds. 

This is poised to open Bitcoin and the cryptocurrency industry to a broader level of capital inflows. Hence, analysts have made conservative predictions that Bitcoin price could double and hit a new all-time high of $80,000.

Notably, Bitcoin is set to execute the next halving event around April 2024. This deflationary impact of the halving could further accelerate the price rally if the Spot Bitcoin ETF applications are approved. 

Here are some vital statistical metrics that indicate how the Bitcoin ETF approval could push BTC prices toward a new all-time high of $80,000 in the near future.

1. Gold (XAU) price was around $700 when SPDR Gold Shares launched the first Gold ETF ($GLD) in November 2004. By August 2011, it had skyrocketed 250% to reach a new all-time high of $2,450. 
2. The total market capitalization of the U.S. stock market is worth $40.5 trillion. 
3. This US stock market is currently over 3,500% larger than the current global crypto market capitalization (TOTALCAP).

Essentially, the a spot BTC ETF means that institutions and traditional investors will be able to invest in Bitcoin as an asset class without the technical of barriers set up a wallet or exchange account.  

Bitcoin Price Forecast After Spot Bitcoin ETF

According to Bank of America report, a $93 million inflow could trigger a 1% increase in Bitcoin prices. Hence, if Bitcoin ETF only needs to attract just 1.7% of the U.S. stock market’s $40.5 trillion cumulative value, for the current Bitcoin market cap of $680 billion to double. 

In other words, going by the Bank of America estimates Bitcoin price could increase 100% if BTC ETF can capture up-to 1.7% of existing capital inflow within the stock markets.