A recent investigation by NYDIG suggests that the introduction of Bitcoin spot ETFs into the market could spur a potential $30 billion growth in BTC demand. To put things in perspective, the crypto trading firm indicated an estimated $27.6 billion in accessible spot-like products. Comparatively, we have an enormous $210 billion invested in gold-centric funds.
For a better understanding, here’s the catch. Bitcoin is said to have about a 3.6 times higher volatility as compared to gold. This means, on a volatility equivalent basis, investors would require 3.6 times less Bitcoin than gold on a dollar basis. This realigned demand could lead to an additional $30B in demand for a Bitcoin ETF that investors could covet.
Interestingly, this speculation inches closer to reality as BlackRock recently submitted applications to list spot Bitcoin ETFs. This strategic move, with a proposed surveillance-sharing agreement, is considered a significant step to prevent market manipulation – a concern often raised by the SEC.
On another note, despite multiple sceptic predictions, El Salvador’s junk-rated bonds due 2027 witnessed a noticeable upward tick in the last six months amidst Bitcoin’s rally. Analysts had warned against El Salvador’s venture into making BTC its legal tender in 2021, predicting an imminent debt default in January. Yet, evidence suggests the junk-rated bonds have performed remarkably well, offering returns of 62% since the onset of 2023. Even more impressively, the bonds have outperformed the Invesco Emerging Markets Sovereign Debt ETF, one of the most significant holders of the nation’s debt.
However, the crypto world has also seen some drawbacks. Kuwait’s financial watchdog recently slapped a comprehensive prohibition on crypto payments, mining, and investments in a bid to counteract money laundering. On the insistence of Financial Action Task Force’s (FATF) global recommendations, the country’s financial ecosystem tends to shun crypto assets. Still, it’s necessary to note that while FATF guidelines do demand explicit measures against money laundering activities, the organisation denies making any direct plea for a crypto ban.
To keep up with cryptocurrency trends, it’s worth noting that XRP’s social dominance surged at its highest since January 2021. This measure determines the percentage of social media discussions related to a particular cryptocurrency, as against the top 100 coins. Experts suggest that an increase in such crowd chatter is often noticed at interim market tops.
Source: Coindesk
