Bitcoin At $45,000 Is Mispriced, Will Race For ETF Fees Push Prices To Record Highs?
January 02 2024 - 2:00PM
NEWSBTC
Most analysts are optimistic that the impending launch of spot
Bitcoin exchange-traded funds (ETFs) in the U.S. could propel the
coin to new heights, way above the $69,000 mark registered in
November 2021. Andrew Kang, co-founder of Mechanism
Capital, believes that Bitcoin at $45,000 is still grossly
undervalued. This is given the anticipated influx of institutional
investment from ETFs, and the effort issuers will put into
marketing their products as they aim to accrue billions in fees in
the months ahead. Learning From Gold And Quest For Fees Kang points
to gold ETFs, which hold over $120 billion in assets under
management (AUM) and generate an estimated $720 million in annual
fees for their issuers. ETF issuers will charge a management fee to
cover the costs associated with operating the ETF, including
custody of coins and trading. Additionally, a fee will be charged
through the bid-ask spread whenever Bitcoin is traded. Related
Reading: Crypto Expert Shares Ultimate Crypto Portfolio Guide To
Make It In 2024 When trading and management fees are stacked,
Bitcoin issuers could generate billions of dollars yearly,
especially if trading volume is high. By Kang’s estimation, Bitcoin
ETF issuers might generate between $10-20 billion in annual fees.
However, this is subject to dominance. After the Securities and
Exchange Commission (SEC) approves multiple spot ETFs, issuers,
including BlackRock and Fidelity, are expected to wage an
aggressive battle for market share. The goal for issuers is
not only to ensure that funds spent on advertising yield, but for
every dollar spent, more is generated into the future. This is
critical because investors are less likely to switch once they
choose an ETF, making early dominance crucial for long-term revenue
generation. Is Bitcoin Ready For A 10X? According to observers,
issuers will promote Bitcoin at every opportunity. This is why
ChainlinkGod while responding to Kang’s post on X, thinks
Bitcoin will also likely track 10X in the sessions ahead since all
issuers are “inherently long” on Bitcoin. Related Reading: Crypto
Analyst Predicts XRP Price Breakout To $22.39, Here’s When Looking
at price charts, Bitcoin continues to edge higher, recently rising
to as high as $45,800, according to price data. At this pace, BTC
bulls extended gains of 2023. This will be as the community expects
the SEC to approve the first Bitcoin ETFs. Even so, it is unclear
when the agency will greenlight this product immediately. BTC
has critical support at around the $44,000 zone, marking 2023
highs. If bulls maintain prices above this line, the odds of the
coin rising to $50,000 in a buy trend continuation pattern will
likely increase. Feature image from Canva, chart from TradingView
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