Crypto financial services platform Matrixport has made a prediction regarding a major rally in Bitcoin (BTC). This rally is expected to be driven by favorable macroeconomic conditions and lower US inflation. According to a recent report titled “Matrix onTarget,” Matrixport highlights the remarkable performance of Grayscale Investments’ Bitcoin Trust (GBTC) shares. These shares have shown an impressive growth of 167% year-to-date, outperforming Bitcoin’s own growth of 71%.
The Impressive Performance of Grayscale Investments’ Bitcoin Trust (GBTC) Shares
At the beginning of the year, GBTC’s net-asset-value (NAV) discount was at -45% and has slightly narrowed to -43%. However, the game-changer came with BlackRock’s announcement of its Bitcoin ETF application on June 15, 2023.
Matrixport reveals in an earlier report that the US registered investor advisor (RIA) community consists of approximately 15,000 advisors overseeing around $5 trillion. The company believes that even a modest 1% allocation recommendation for Bitcoin by this community could result in around $50 billion in inflows. Comparing this to precious metals ETFs, which have a market cap of around $120 billion, Matrixport suggests that if 10-20% of precious metal ETF investors consider diversifying into a Bitcoin ETF as a hedge against monetary debasement and inflation, we could witness an inflow of $12 to $24 billion into the Bitcoin ETF. Furthermore, with a larger influx of $50 billion resulting from a 1% allocation recommendation by RIAs, Bitcoin has the potential to rally up to $56,000.
Optimism Towards the Launch of a Spot Bitcoin ETF
Matrixport’s projections align with the growing optimism towards the launch of a spot Bitcoin ETF. In May, a US court ruled in favor of Ripple in an ongoing lawsuit brought by the SEC. The ruling stated that selling XRP on exchanges does not constitute an investment contract. JPMorgan analysts led by Nikolaos Panigirtzoglou believe that this victory for Grayscale implies that the SEC will likely be forced to approve multiple spot BTC ETF applications. They state that for the SEC to defend its denial of Grayscale’s proposal of converting its Bitcoin trust into an ETF, it would have to retroactively withdraw its previous approval of futures-based Bitcoin ETFs. However, this move would be disruptive and embarrassing for the SEC, making it unlikely.
