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NYDIG, a leading cryptocurrency trading firm, has unveiled a compelling research report predicting a remarkable surge in demand for Bitcoin (BTC) if spot-based exchange-traded funds (ETFs) are introduced. The report estimates a staggering influx of $30 billion, signaling a potentially significant boost for the world's most prominent digital asset.

In recent weeks, the crypto market has been engulfed in a fervent wave of spot-ETF fever, triggered by noteworthy filings from prominent players like BlackRock (BLK), Fidelity, and other major entities.

“The brand recognition of BlackRock and the iShares franchise, familiarity with purchase and sale methods through securities brokers, and simplicity of position reporting, risk measurement, and tax reporting, a spot ETF could bring some noted benefits compared to existing alternatives,” NYDIG writes in its report.

NYDIG has already estimated that there is a substantial $28.8 billion in bitcoin assets under management, with $27.6 billion invested in spot-like products.

Bitcoin is frequently referred to as the digital equivalent of gold, leading to inevitable comparisons with gold exchange-traded funds (ETFs) that emerged in the early 2000s. Presently, gold ETFs account for merely 1.6% of the entire global gold supply, as indicated by NYDIG. In contrast, central banks hold approximately 17.1% of the total gold supply, while funds invested in Bitcoin hold about 4.9% of the total Bitcoin supply.

The demand for the digital and analog versions of these assets in funds differs significantly: there is an astounding $210 billion invested in gold funds, whereas only $28.8 billion is allocated to bitcoin funds.

“Bitcoin is about 3.6x more volatile than gold, meaning that on a volatility equivalent basis, investors would require 3.6x less bitcoin than gold on a dollar basis to get as much risk exposure. Still, that would result in nearly $30B of incremental demand for a bitcoin ETF,” NYDIG writes.

The newsletter Ecoinometrics adopts a more conservative stance regarding a bitcoin ETF.

Ecoinometrics asserts that the GLD ETF has effectively addressed a notable gap in the market by offering a convenient and easily tradable product that accurately mirrors the price movements of physical gold.

Nevertheless, drawing parallels between gold ETFs and bitcoin ETFs may be misleading, as the substantial surge in gold's value during that period was primarily attributed to a favorable macroeconomic climate and a weakened dollar. This decade witnessed the impacts of the war on terror, China's ascendancy, and the onset of a burgeoning U.S. deficit, all contributing to gold's notable growth.

"So while the GLD ETF definitely didn’t hurt and probably brought some nice inflow to the gold market, macro was really in the driver’s seat over that period," they write. "A spot Bitcoin ETF can help with drumming up more interest into Bitcoin and will undoubtedly attract some fresh money into the space. But that won’t make one Bitcoin worth $100k single-handedly."

The true potential for a Bitcoin ETF hinges on the perfect alignment of various factors: the successful introduction of the ETF, a depreciation of the US dollar, a Federal Reserve shift towards Quantitative Easing, and a generational transfer of wealth to younger individuals who are increasingly inclined to invest in cryptocurrencies, as stated by the authors.