JMP Securities Predicts Bitcoin Could Reach $280K
[TL; DR]
The price of Bitcoin may reach $280 in the next two years as a result of huge capital inflows into spot bitcoin ETFs.
Currently, bitcoin’s market capitalization stands at over $1.261trillion although its value has decreased by about 12.9% within the last 10 days.
Following the Winklevoss brothers’ filing of a spot bitcoin ETF application in 2013 it took the SEC over 10 years to approve the first batch of spot crypto ETFs
Introduction
Bitcoin has captured the attention of the entire crypto market as we move towards the 2024 halving event. This time bitcoin has set a record of attaining a new ATH a few months before the next halving event. This seems to confirm that the launch of spot bitcoin ETFs in the United States has brought changes to Bitcoin price dynamics.
As a fact, bitcoin hit its recent ATH of $73,737 on 14 March. However it has already retraced towards $61,000. This analysis covers how spot ETFs have changed the bitcoin market dynamics. We will also present bitcoin price predictions for 2025 and 2026.
JMP Securities: Bitcoin May reach $280K with 220 ETF Investment
Capital inflows into spot bitcoin ETFs has led to high bitcoin investment predictions. The JMP Securities bitcoin forecast indicates the crypto market’s confidence in the coin. In line with the current cryptocurrency market trends, JMP Securities analysts have predicted that the bitcoin price may reach $280,000 within the next three years.
That bitcoin $280K prediction is based on the premise that there will be a $220 billion influx into the spot bitcoin ETF sector in the United States within the next three years which should lead to a rise in the demand for the cryptocurrency. In essence, the BTC ETF approval has created new bitcoin investment opportunities which have a strong influence on its value.
Already, the short United States BTC ETF history has indicated that exchange-traded funds can lead to BTC exponential growth since the asset has attained a new all-time high of $73,737 within only two months after their launch. Also, the cryptocurrency ETFs have attracted over $10 billion inflows within two months.
Since we are in the initial phase of the ETFs some analysts predict that the sector will receive much investments. The same sentiment is evident in JMP Securities’ $220 billion bitcoin inflows assertion.
JMP’s bitcoin $280k prediction shows the firm’s bullish sentiment. The company has emphasized that the capital inflows which the bitcoin ETF sector has so far received is just a tip of the iceberg.
Investing.com has quoted JMP securities as saying, “We estimate that after ~$10B in flows to date, two months into launch, flows will actually continue to grow materially from here over the next few years as the ETF approval is just the beginning of a longer process of capital allocation.”
It added, “Our experience is that following the Flow of funds is critical to price movements over time, and when barriers to investment are removed, in turn allowing incremental flows into an asset (or asset class), the potential multiplier on price can be tremendous.”
The JMP Securities team has predicted that bitcoin will experience a 25x multiplier arising from the bitcoin ETF inflows which may enable the BTC price to rise to $280K. The firm said, “We estimate a current multiplier of ~25x, which on our flow estimate would equate to an incremental $280K per Bitcoin.”
The current cryptocurrency investments trends will lead to bitcoin market cap growth which will likely attract more institutional investors to invest in the asset. As long as the cryptocurrency market cap continues to grow, bitcoin will get the attention it deserves from big traditional financial investors and national governments that may follow El Salvador’s lead.
Spot Bitcoin ETFs Witness Major Inflows, Hinting at Potential Liquidity Crisis
Analysts expect capital inflows into bitcoin ETF investment to continue. As an example, Ki Young Ju, the CryptoQuant CEO, thinks that a BTC liquidity crisis may occur if the bitcoin investment forecast on financial inflows into spot bitcoin ETFs comes true.
In fact, a rise in institutional investment into the ETFs will likely trigger the liquidity crisis. The ETF inflows bitcoin is due to the confidence the traditional financial sector has developed in BTC following the launch of the exchange traded funds in the United States.
Since the approval of bitcoin and the subsequent BTC ETF growth large financial institutions have been injecting funds into the sector. If some crypto investors continue to accumulate bitcoin that may lead to a sell-side liquidity crunch.
The relation between the escalating demand for bitcoin from institutional investors and a decrease in its supply will likely have a big impact on the BTC future value which will affect its liquidity.
Commenting on the possibility of a bitcoin liquidity crisis Ki Young Ju said, “Bears can’t win this game until spot Bitcoin ETF inflow stops… At this rate, we’ll see a sell-side liquidity crisis within 6 months… Once a sell-side liquidity crisis happens, its next cyclical top may exceed our expectations due to limited sell-side liquidity and thin order book.”
Bitcoin’s Market Cap to Soar with Projected ETF Inflows Fuelling Exponential Growth
We have already witnessed several BTC ETFs milestones like the high capital inflows which may affect the bitcoin future prices. The current bitcoin investment analysis indicates that the market will continue to witness bitcoin market cap growth as long as there is sustained capital inflows into BTC ETFs.
For example, on 14 February about a month after the launch of BTC ETFs in the United States the bitcoin price rose to $52,079.00, its first highest point since December 2021. At the same time, its market cap also flipped the $1 trillion mark, another feat it last attained in December 2021. Currently, bitcoin has a market capitalization of over $1.261 trillion after losing 12.9% from its 14 March peak.
Read also: Bitcoin ETF Approval: Potential Catalyst for Historic Crypto Bull Run
The reason behind that move was a rise in capital inflows into the bitcoin sector due to the newly launched spot crypto ETFs in the United States. By that time there had been over $9.5 billion inflow into the bitcoin market since the launch of the ETFs.
In the second week of March when bitcoin attained the latest ATH the net inflows into BTC ETFs surpassed $1 billion while bitcoin’s market capitalization exceeded $1.436 trillion. Thus, there seems to be a strong correlation between the change in BTC ETF inflows and bitcoin market capitalization. Therefore, as capital inflows into the ETFs increases we anticipate the BTC market cap to grow.
Read also: Coin Metrics: Market Structure for Spot Bitcoin ETFs
Bitcoin Approval History
The BTC ETF history in the United States started in 2013 when Cameron and Tyler Winklevoss, co-founders of crypto exchange Gemini, filed their spot bitcoin ETF application with the SEC. However in 2017 the SEC rejected their application on the grounds that the cryptocurrency market was not yet mature and the exchanges had no measures to prevent market manipulation.
In 2016 Grayscale filed its application with the SEC so it could convert its bitcoin trust into a spot bitcoin ETF. Nonetheless, before the SEC responded Grayscale withdrew its application citing lack of regulatory clarity.
In 2022, the SEC rejected several spot bitcoin applications from different asset management firms that include SkyBridge, Fidelity and Bitwise. Fast forward to 2023 several asset management firms including ARK Investments, BlackRock, Fidelity and Invesco filed their spot bitcoin ETF applications.
When the SEC rejected Grayscale’s application the asset management firm filed an appeal through a federal appeals court in Washington D.C. After assessing Grayscale’s concerns the Federal Appeals Court ruled in its favour. Following months of negotiations between the SEC and several asset management firms the regulatory authority approved 11 BTC ETFs on 10 January 2024.
Bitcoin Price Predictions for 2025 and 2026
There are two key catalysts for bitcoin price rise in 2024 and 2025. The recent launch of the spot bitcoin ETFs and the on-coming halving event have created a strong bullish momentum that may last till 2026. As a result, several analysts have predicted high bitcoin prices for 2025 and 2026.
For example, Ark Invest has come up with a bitcoin price prediction of $120,000 by the end of the year if investors commit about 1% of investable funds to bitcoin. Thus, this year’s bitcoin price rally should act as a strong base for bitcoin future prices. However, there are several factors like bitcoin regulatory updates which can also affect the BTC price.
One of the most optimistic cryptocurrency forecasts comes from Bernstein Research, a well-known global asset management firm, that has predicted the price of bitcoin to reach $150,000 in 2025. On the other hand, Coindex forecasts the price of bitcoin to reach $155,000 in 2025 and $179,000 by 2026 as the following table indicates.
Bitcoin Price Prediction for 2025 and 2026 - Coindex
Another on-chain analytical platform, Long Forecast, forecasts the price of bitcoin to fluctuate between $131, 907 and $148,798 in 2025 and between $79,997 and $92,797 in December 2026. As you see, Long Forecasts predicts that bitcoin may retrace in 2026.
Conclusion
JMP Securities believes that the bitcoin price may reach $280K within the next three years should the capital inflows in BTC ETFs continue at the current rate. In the second week of March the bitcoin market cap surpassed $1.4 trillion and on 14 March bitcoin attained a new all-time high of $73,737. In the meantime, the market anticipates bitcoin to have another all-time high after the April 2024 halving event.
