The cryptocurrency market anticipates the possibility of a Bitcoin ETF (exchange-traded fund) approval, which has sparked discussions among experts and enthusiasts alike. This development could unleash massive capital into Bitcoin, potentially transforming the industry.
Some proponents like Samson Mow and Raoul Pal foresee the price of Bitcoin skyrocketing to an unprecedented $1 million.
Bitcoin ETFs Will Trigger Massive Capital Inflows
In a recent interview, CEO of JAN3 Samson Mow predicted a significant rally in Bitcoin’s price, potentially reaching $1 million. He argued that the ongoing crypto bull market differs fundamentally from previous ones, breaking the conventional four-year cycle pattern.
According to Mow, the unprecedented price surge will be driven by a combination of supply, demand, and price shocks.
“It looks like all the [Bitcoin] ETFs are going to be approved on the same day… [What this does is] hitting a very limited supply of Bitcoin on the exchanges and available for purchase with a torrent of money. So, it’s basically supply shock multiplied by demand shock. And that gives you a price shock. This is why [Bitcoin] can go really high all at one time.” Mow affirmed.
Mow highlighted that the approval of spot ETFs would be a pivotal moment, unlocking a torrent of US institutional capital into Bitcoin. This influx of billions in a very short timeframe could trigger a rapid price escalation.
“I don’t think [the current] rally is a very special rally. This is a rally for ants. The real rally is when [Bitcoin goes] to $1 million, and that is when the spot [Bitcoin] ETFs are approved, and we have tens of billions, maybe hundreds of billions of dollars flowing to Bitcoin in a very short time frame,” Mow said.
Read more: How To Prepare for a Bitcoin ETF: A Step-by-Step Approach
Mow’s prediction is rooted in the belief that Bitcoin’s limited supply. When hit with substantial capital inflow, will lead to a dramatic price increase, akin to the 20x rise observed in 2016-2017.
BTC Price Projects “Extraordinary Set of Numbers”
Raoul Pal, co-founder and CEO of Real Vision, also provided a macroeconomic perspective on Bitcoin’s potential growth. He identified two massive secular trends – the business cycle and financial conditions – significantly influencing asset prices. Pal suggested that Bitcoin could reach between $500,000 and $1 million by the end of 2025.
“These cycles can be crazy and this one feels more like the 2017 cycle than it does the prior cycle. And, that cycle didn’t have a lot of central banks printing… Central banks’ balance sheets [are now] rising. We saw 20% growth and what happened to liquidity was crypto absolutely exploded. I kind of feel like that’s the case now,” Pal emphasized.
Analyzing Bitcoin’s performance against the S&P 500 since 2013, Pal noted an 88% annual outperformance, reinforcing Bitcoin’s position as a formidable asset in the financial market. He emphasized the high-risk adjusted returns in crypto compared to other investment options, attributing this to the asset’s high correlation with global liquidity trends.
“[Bitcoin] is the horse I back the most. It’s the fastest horse in the race. Best risk adjusted returns, high correlations to this global liquidity index, which is our everything code. So we know how the asset price behaves which gives us a competitive advantage when we use our proprietary frameworks,” Pal added.
Furthermore, Pal discussed the impact of the Bitcoin halving cycle and its correlation with global debt refinancing cycles and election cycles. He posited that these macro factors, combined with the anticipation of an ETF, will likely propel Bitcoin to new heights.
Read more: BTC Price Prediction for 2024 After Bitcoin ETFs Approval
The approval of Bitcoin ETFs is seen as a game changer. It would provide a regulated and easy path for institutional investors to gain exposure to Bitcoin, thereby increasing demand and reducing barriers to entry. This, in turn, could lead to a substantial price increase as new capital floods the market.
“[Bitcoin] gives us a kind of extraordinary set of numbers… It gives us crazy numbers like $218,000 by May. That’s post-halving and post-ETF. It would also give you a target of half a million bucks by 2026 which is in line with the [logarithmic] trend, so it’s possible,” Pal concluded.
The Path to $1 Million Awaits a Major Catalyst
Mow and Pal both highlighted the crucial role of institutional investors in driving Bitcoin’s price. The entry of big players such as BlackRock signals a growing acceptance of Bitcoin as a legitimate investment vehicle. These institutional inflows are expected to increase dramatically following the approval of a Bitcoin ETF.
The arguments presented by Mow and Pal point towards a transformative period for Bitcoin. Indeed, the potential ETF approval could act as a catalyst for an unprecedented price rally.
While past performance does not guarantee future results, the combination of limited supply, institutional interest, and favorable macroeconomic conditions presents a compelling case for Bitcoin’s potential ascent to $1 million.