Bitcoin Spot ETFs Could Bring $30B in New Demand, According to NYDIG.

Bitcoin Spot ETFs Could Bring $30B in New Demand, According to NYDIG.

The Potential Impact of Bitcoin Spot-ETFs on the Blockchain Industry

The blockchain industry has been abuzz with the potential introduction of Bitcoin spot-based exchange-traded funds (ETFs). According to recent research by crypto trading firm NYDIG, these ETFs could bring a staggering $30 billion in new demand for the world’s largest digital asset, Bitcoin1. This development has been spurred by the filings of major financial players such as BlackRock and Fidelity, signaling a growing interest in crypto among institutional investors.

The Benefits of Bitcoin Spot-ETFs

NYDIG’s research report highlights several advantages of spot-based ETFs compared to existing alternatives2. The brand recognition and credibility of BlackRock, coupled with the familiarity of purchase and sale methods through securities brokers, make spot ETFs an attractive option for investors. Additionally, the simplicity of position reporting, risk measurement, and tax reporting further enhances the appeal of these ETFs.

Currently, there are already $28.8 billion in bitcoin assets under management, with $27.6 billion in spot-like products3. However, these figures only represent a fraction of the potential demand for Bitcoin ETFs. To put things into perspective, gold ETFs hold a mere 1.6% of the total global gold supply, while central banks hold 17.1%4. In contrast, bitcoin funds hold 4.9% of the total bitcoin supply5. This disparity in demand between the digital and analog versions of the asset is striking – there is over $210 billion invested in gold funds, while only $28.8 billion in bitcoin funds6.

The Potential Incremental Demand for Bitcoin ETFs

Bitcoin is often referred to as “digital gold” due to its scarcity and store of value properties. NYDIG points out that Bitcoin is about 3.6 times more volatile than gold7. Therefore, on a volatility equivalent basis, investors would require 3.6 times less bitcoin than gold on a dollar basis to achieve the same level of risk exposure. This calculation implies that a Bitcoin ETF could potentially generate nearly $30 billion of incremental demand8.

However, it is essential to maintain a cautious outlook. Ecoinometrics, a newsletter specializing in crypto analysis, notes that comparisons between gold ETFs and bitcoin ETFs can be misleading9. The significant rise of gold ETFs in the early 2000s was largely influenced by favorable macroeconomic factors, such as the war on terror, China’s rise, and a weakening dollar. A spot Bitcoin ETF can undoubtedly attract fresh money into the crypto space, but it alone will not propel the price of Bitcoin to $100k10.

The Convergence of Factors for Bitcoin ETF Success

The real potential for a Bitcoin ETF lies in a convergence of factors11. Besides the launch of the ETF itself, a weaker US dollar, a Federal Reserve move towards Quantitative Easing, and a generational wealth transfer to younger individuals more likely to invest in crypto are all critical components for success. These factors, combined with the increased interest in Bitcoin driven by a spot ETF, can significantly impact the blockchain industry.

In conclusion, the introduction of Bitcoin spot-based ETFs has the potential to revolutionize the blockchain industry. With an estimated $30 billion in new demand, these ETFs can attract institutional investors and bridge the gap between traditional finance and the crypto space. However, it is important to keep in mind that the success of Bitcoin ETFs depends on a variety of factors, including broader macroeconomic conditions. The approval of these ETFs will undoubtedly be a significant milestone for the blockchain industry, and the industry eagerly awaits this development.

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Edited by Omkar Godbole and Parikshit Mishra.


  1. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  2. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  3. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  4. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  5. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  6. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  7. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  8. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  9. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  10. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

  11. Source: “Bitcoin ETFs Could Bring $30B Demand, NYDIG Research Shows”, CoinDesk, Link↩︎

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