Bitcoin has a chance to soar in the final months of 2021 as the first crypto-linked exchange traded fund is set to hit the market on Tuesday.
According to Fundstrat founder and cryptocurrency enthusiast Tom Lee, the launch of the ProShares trust fund could help catalyze more purchases in Bitcoin BTCUSD (1.26%) by a number of new private investors, and Bitcoin prices could rise as a result.
The fund provider ProShares seemed ready to launch the Bitcoin Strategy ETF on Tuesday under the symbol “BITO” and thus become the first USETF with a connection to cryptocurrencies, a milestone for the young digital ensemble sector, which Was born in 2008.
The prospect of an ETF that could theoretically give more investors access to Bitcoin without having to worry about custody of the virtual asset has driven Bitcoin prices to a record high of nearly $ 65,000.
Fundstrat estimates that 93 million households own stocks while 40 million own bitcoins, with average account balances per household of around $ 10,000 per bitcoin, a fraction of the average $ 200,000 households own in stocks.
“Crypto is about 1% of allocated liquid assets,” wrote the Fundstrat founder (see chart above).
Lee’s “Behind the Shell” study, however, suggests that future ETF inflows will serve as a major driver, new and close to Bitcoin price.
“We don’t know the exact number of households that own bitcoins in the US, but we know for sure that they’re not as prevalent as stocks,” Lee said in a research note on Monday.
Lee speculated that if BITO proves to be as popular an ETF as Invesco QQQ Trust QQQ, demand for Bitcoin ETFs could increase by $ 50 million per day, say + 1.01%. The QQQs have assets of approximately $ 190 billion, and another Bitcoin-related fund, Grayscale Bitcoin Trust GBTC, 3.71%, has assets of approximately $ 32 billion, making it the largest crypto Funds.
Lee argued that based on the current supply where miners are producing $ 10 million a day worth of bitcoins, the appetite for the world’s leading cryptocurrency will far exceed the demand for stock-to-flow .
Fundstrat estimates that the resulting price level to balance these supply / demand dynamics is around $ 168,000.
