If History Repeats - Next 8 Years .... (Patreon)

The green light for a U.S. spot Bitcoin ETF could unlock trillions in market value.

Recall the momentous launch of the SPDR Gold Shares (GLD) by State Street on November 18, 2004. Within the next eight years, gold witnessed a monumental surge, skyrocketing from $400 to over $1,800 per ounce, thereby ballooning its market cap from approximately $2 trillion to around $10 trillion.

Currently, Bitcoin's market capitalization hovers around $750 billion, which is significantly lower than gold's valuation back in 2004. In my perspective, should a U.S. spot Bitcoin ETF come to fruition, we might see Bitcoin embark on a similar exponential journey as gold did post-2004, potentially at an even more rapid clip.

It's my contention that the initial inflow from the adoption of Bitcoin ETPs might be modest—a few tens of billions of dollars—and not arrive overnight. Yet, considering Bitcoin's relatively tight supply (due to the steadfastness of long-term holders) along with its built-in scarcity from halving events, even a modest boost could be impactful.

Beyond the direct effects of an ETF, the very existence of such a financial product would further solidify and normalize Bitcoin's role in investment portfolios, encouraging broader acceptance beyond ETF-related channels. I foresee sovereign nations and wealth funds opting to hold Bitcoin directly, thereby ensuring optionality for mining operations and establishing their own Bitcoin-centric financial markets. For reference, a significant portion of gold's price rally was propelled by central banks' direct acquisition of gold, independent of ETPs, although it was the ETPs that played a pivotal role in building the initial comfort level with the asset class. — Gabor Gurbacs