JMP Securities predicts that Bitcoin could reach $280,000, boosted by a $220 billion investment in Bitcoin ETFs over three years. Bitcoin spot ETFs have seen inflows, suggesting a larger trend that could lead to a sell-side liquidity crisis. The anticipated influx could significantly impact Bitcoin’s market capitalization, with a multiplier effect leading to exponential growth.
JMP Securities predicts an unprecedented rise in the value of Bitcoin, which could reach $280,000.
This prediction comes from the company’s latest research report. It forecasts a substantial inflow of $220 billion into Bitcoin exchange-traded funds (ETFs) over the next three years. This reflects growing investor interest in cryptocurrency and positions Coinbase to benefit from this evolution.
Bitcoin Price at $280,000?
JMP’s report highlights the remarkable trajectory of Bitcoin spot ETFs, which saw inflows reach $10 billion two months after their launch. According to analysts, such a staggering figure represents the initial phase of a much larger trend.
With the approval of the ETF as a catalyst, these flows are expected to continue to increase. In fact, Ki Young Ju, CEO of CryptoQuant, highlighted that a “sell-side liquidity crisis” is imminent if the influx of institutional investments into Bitcoin continues. Ju said the following:
“The bears cannot win this game until the timely inflow of Bitcoin ETFs stops… At this rate, we will see a sell-side liquidity crisis within 6 months… Once a sell-side liquidity crisis occurs, its next cyclical high may exceed our expectations due to limited sell-side liquidity and thin order book.”
A key to these optimistic outlooks is the possible multiplier effect of new capital on the price of Bitcoin. JMP analysts, including Devin Ryan, stated that a planned inflow of $220 billion could exponentially increase the cryptocurrency’s market capitalization, resulting in a valuation of $280,000 per Bitcoin.
This projection is based on an estimated current multiplier of new capital of approximately 25 times. Therefore, it suggests a significant impact on the global market capitalization of Bitcoin.
JMP Securities: Bitcoin Spot ETF Will Be Behind the Cryptocurrency Boom
While Bitcoin ETF spot inflows have exceeded expectations, reaching $10 billion just two months after their launch, JMP said that “the activity (and flows) experienced so far likely remains the tip of the iceberg,” adding that flows will continue to grow materially as the ETFs approval was just the beginning of a “longer capital allocation process.”
“We estimate that $220 billion of incremental flows will enter ETFs over the next three years, which could also have a large impact on the price of bitcoin given the equity multiplier,” wrote analysts led by Devin Ryan.
Interestingly, JPMorgan analyst Nikolaos Panigirtzoglou stated that the recent influx could actually be due to a shift of capital from traditional cryptocurrency platforms, such as exchanges, to spot Bitcoin ETFs. However, he acknowledged that this may change in the future.
“Cryptocurrency exchanges saw a cumulative Bitcoin outflow of around $7 billion since the launch of the Bitcoin Spot ETF. In other words, the net flow of retail investors into newly created ETFs is more likely to be closer to $2 billion than $9 billion.”
Panigirtzoglou noted that the Bitcoin ETF spot market will expand to $62 billion in the next two to three years, and Coinbase is well positioned to benefit from the growing ETF market, with JMP Securities adjusting its price target for COIN shares to $300, from $220.
By Audy Castaneda
