According to a recent report by crypto trading firm NYDIG, Bitcoin (BTC), spot-based Exchange-Traded Funds (ETFs), could lead to a $30 billion increase in demand for the world’s largest digital currency.

BlackRock (BLK), Fidelity, and others have filed recent filings that have triggered a spot-ETF frenzy on the crypto market.

NYDIG’s report states that “the brand recognition of BlackRock, the iShares Franchise, familiarity with purchasing and selling methods through securities brokers and simplicity of position reports, risk measurement and tax reporting could be some of the benefits of a spot ETF compared to other alternatives.”

NYDIG’s model has already shown that there are 28.8 billion dollars in bitcoin assets managed, with 27.6 billion dollars in spot-like product.


There will be comparisons made between Bitcoin and gold ETFs that were listed in the early 2000s. NYDIG notes that gold ETFs currently hold just 1.6% of global gold, while central banks hold 17.1%. Bitcoin funds, on the other hand, hold 4.9%.

The demand for digital and analog versions of the asset is vastly different: over $210 billion has been invested in gold funds, while only 28.8 billion have been invested in bitcoin funds.

“Bitcoin has a volatility of 3.6x that of gold. This means, on a volatility-equivalent basis, investors will need 3.6x less Bitcoin than gold to achieve the same level risk exposure. This would still result in an additional $30B demand for a Bitcoin ETF, writes NYDIG.

Ecoinometrics’ newsletter has a cautious take about a bitcoin ETF.

Ecoinometrics writes that the GLD ETF was a product that filled a significant gap in the market. It provided a product which could be traded easily and tracked the gold price.

Comparisons between bitcoin ETFs, and gold ETFs can be misleading. The significant increase in gold that occurred during this time period was due to the favorable macroeconomic environment and a falling dollar. Remember how the U.S. began to balloon its deficit, China rose, and there was a war on terror?

They write: “While the GLD ETF didn’t harm and likely brought some nice inflows to the gold market during that time, macro was the real driver of the market at the time.” A spot Bitcoin ETF will help to attract new money and increase interest in Bitcoin. But it won’t make a single Bitcoin worth $100,000.

They write that the real potential of a Bitcoin ETF is a convergence of several factors, including the launch of the ETF and the weakening of the US dollar.

Now, we only need to wait until the approval.

Omkar Godbole, Parikshit Miishra and Omkar Godbole edited the book.