A new investor note published by analyst Needham & Company projects that a bitcoin exchange-traded fund (ETF) could attract as much as $300m in new assetsÂ in the first week alone.
Writing about the potential impact of an ETF on the nascent market, analyst Spencer Bogart speculates that such an approval is likely to have a “profoundly positive” effect on the price of bitcoin, and that the $300m estimate is “conservative”.
“The resulting effort to source the underlying bitcoin for the trust would likely drive the price of bitcoin up significantly,” Bogart writes.
In the scenario, he told CoinDesk that $300m in purchases would mean that the ETF’s authorized participantsÂ would need to source this volume of bitcoin, sending prices higher. (Bitcoin’s market cap is just over $14.5bn today).
The catch, however, is that Bogart doesn’t believe one of the major bitcoin ETF filings â€“ the Winklevoss Bitcoin ETF â€“ is likely to be approved anytime soon.
Though the US Securities and Exchange Commission (SEC) is expected to make a final decision on the filing by 11th March, Bogart speculates that the ETF’s “probability of approval is very low”.
The note reads:
“Taken together, we think the positive effect that a bitcoin ETF would have on the price of bitcoin is vastly underappreciated and that the probability of approval is drastically overestimated within the industry.”
Ultimately, Bogart projects that the Winklevoss Bitcoin ETF has a less than 25% chance of being approved due to a “confluence of fear, uncertainty and doubt coupled with basic incentives at the SEC”.
Bogart goes on to label any approval a “low probability” event with “very significant upside”.