Bitcoin (BTC) broke above $29,000 on Wednesday morning as institutional investors anticipate the approval of Blackrock’s Bitcoin ETF. This approval could have a similar impact on BTC price as the launch of the first Gold ETF in 2004 had on the price of gold.
An Exchange-Traded Fund (ETF) is a financial product that tracks the price of an asset without requiring investors to hold custody of the asset directly.
If approved, Blackrock’s Bitcoin ETF will enable indirect trading of BTC on traditional stock exchanges, making Bitcoin and the cryptocurrency industry more accessible to a wider market.
There are several statistical metrics that suggest the Bitcoin ETF could push BTC prices above $40,000 in the near future:
- The total market capitalization of the US stock market is currently valued at $40.5 trillion, which is 3,600% larger than the current global crypto market capitalization.
- When the first Gold ETF, SPDR Gold Shares ($GLD), launched in November 2004, the price of gold was $700. By August 2011, the price had surged by 250% to reach an all-time high of $2,450.
The chart above demonstrates the significant increase in the price of gold following the launch of the first Gold ETF in 2004.
Recent on-chain data suggests that institutional investors are already betting big on Bitcoin in anticipation of Blackrock’s Bitcoin ETF approval. Whale investors have been increasing their trading activity, with BTC large transactions rising by 47% in just three days.
Large Transactions track the trading activity of institutional investors and high-net-worth individuals. The chart above indicates that Blackrock’s ETF application has boosted institutional investors’ confidence in BTC.
If approved, a Bitcoin ETF would be a significant step towards mainstream acceptance and legitimacy of Bitcoin as an asset class. This could lead to BTC reclaiming the $40,000 milestone in the near future.
According to IntoTheBlock’s IOMAP data, BTC’s price has established stable support above $27,000. As long as it stays above the $26,400 – $27,400 range, there is a good chance it will reach a new peak in 2023. However, BTC must first clear the initial resistance at $29,500 to face less resistance towards $33,000.
However, if BTC drops below $26,000, it could enter another bearish trend. But the solid support at $26,400 may prevent further decline. Around that zone, 2.38 million addresses bought over 1.14 million BTC at a minimum price of $26,493.
It’s important to note that this article is for informational purposes only and not financial or investment advice. Market conditions can change rapidly, so conducting your own research and consulting with professionals is essential.
