Spot Bitcoin ​ETFs could see $220 billion in inflows over the next three years: JMP Securities

Spot Bitcoin (BTC) exchange-traded funds could see inflows of $220 billion over the next three years, which could lead to a four-fold increase in the price of BTC to $280,000 when a multiplier is applied to the new capital, broker JMP Securities said. It said in a research report Wednesday.

Cryptocurrency exchange Coinbase (COIN) remains well-positioned if inflow estimates turn out to be correct, JMP analysts said. The broker raised his price target for the stock from $220 to $300, according to Factset data. This is the highest among Wall Street analysts and maintains a market outperform rating. Coinbase shares are trading 2.6% higher at $262.92 at press time.

Although spot Bitcoin ETF inflows have shattered expectations and reached $10 billion within two months of launch, JMP said “the activity (and flows) experienced to date is likely still just the tip of the iceberg” as an ETF. Flows will continue to increase substantially, he added. The approval was just the beginning of a “longer process of capital allocation.”

“We estimate that $220 billion of incremental flows will flow into ETFs over the next three years, which could have a significant impact on the price of Bitcoin when capital multipliers are taken into account,” said analysts led by Devin Ryan. I wrote:

“If we are correct in the direction of net ETF inflows reaching $220 billion using our current estimate of the new capital multiple of ~25X, this alone would increase Bitcoin market capitalization by $5.5 trillion, or $280,000 per Bitcoin. can.” the authors wrote.

Spot Bitcoin ETFs hit a new daily record of net inflows of 14,706 bitcoins worth more than $1 billion on Tuesday, according to data tracked by BitMEX Research.

A separate analysis by JPMorgan suggests the Bitcoin spot ETF market could grow to about $62 billion in the next two to three years, the bank said in a report last week.

Read more: Bitcoin is unlikely to match gold allocation in nominal investors’ portfolios: JPMorgan