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Up to $5 Billion Bitcoin ETF Inflows in First Two Weeks of Post-Approval, Says Valkyrie Founder

Last Updated January 10, 2024 2:38 PM
James Morales
Last Updated January 10, 2024 2:38 PM

Key Takeaways

  • Valkyrie Investments’ Steven McClurg expects the SEC will approve 10 spot Bitcoin ETFs by close of business on Thursday.
  • If they are approved, McClurg said ETFs could witness inflows of up to $5 billion dollars in the first fortnight.
  • However, he said that there may not be an immediate influx of institutional investment.

The United States Securities and Exchange Commission (SEC) is due to announce whether it will approve applications to list spot Bitcoin Exchange Traded funds on US exchanges by Thursday, January 11.  

According to Valkyrie Investments co-founder and CIO Steven McClurg, if they get the green light, billions of dollars could flow into the new funds in the proceeding weeks. 

Valkyrie Founder Forecasts ETF Investment Surge

In a recent interview , McClurg said Valkyrie is expecting the SEC to officially approve 10 of 13 pending Bitcoin ETF applications at the close of business on Wednesday. If approval is granted, he expects funds launched by Valkyrie and other applicants will begin trading the next day. However, he noted that “one or two might not get off the ground on day one.”

Valkyrie anticipates its Bitcoin ETF drawing between $200 million to $400 million on its first day, McClurg said. Collectively, he predicted Bitcoin ETFs generating $4-5 billion of inflows within a fortnight. 

There is certainly precedent for Bitcoin funds attracting significant investment right off the bat. For instance, when ProShares’ Bitcoin futures ETF launched in 2021, it raised over a billion dollars in just two days. 

Meanwhile, research by Galaxy anticipates the total investment in Bitcoin ETFs ultimately soaring to as much as $400 billion.

Retail Investors Expected to Take the Lead

Much of the excitement surrounding spot Bitcoin ETFs stems from their potential for opening up the crypto market to institutional investors. However, McClurg noted that an influx of institutional money won’t occur overnight.

Observing that most financial advisers won’t recommend an ETF to their clients until it has a two or three year track record, the Valkyrie founder predicts the first wave of ETF buyers will mostly consist of retail investors. He said: “Out of the gate, it’s going to be mostly retail [and] some financial advisors.”

Finally, McClurg speculated an exodus of capital from the Grayscale Bitcoin Trust (GBTC) could also provide a significant source of funds for more cost-efficient Bitcoin ETFs in the coming weeks.

Amid an ETF price war that has seen prospective issuers attempt to attract investors with lower fees, GBTC’s 2.5% management fee could soon be significantly undercut by new, exchange-traded alternatives.

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