Bitcoin At $45,000 Is Mispriced, Will Race For ETF Fees Push Prices To Record Highs?

Dalmas Ngetich

1 year ago

2 mins read

Reason to trust

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Created by industry experts and meticulously reviewed

The highest standards in reporting and publishing

How Our News is Made

Strict editorial policy that focuses on accuracy, relevance, and impartiality

Ad discliamer

Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio.

Most analysts are optimistic that the impending launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S. could propel the coin to new heights, way above the $69,000 mark registered in November 2021.

Andrew Kang, co-founder of Mechanism Capital, believes that Bitcoin at $45,000 is still grossly undervalued. This is given the anticipated influx of institutional investment from ETFs, and the effort issuers will put into marketing their products as they aim to accrue billions in fees in the months ahead.

Learning From Gold And Quest For Fees

Kang points to gold ETFs, which hold over $120 billion in assets under management (AUM) and generate an estimated $720 million in annual fees for their issuers. ETF issuers will charge a management fee to cover the costs associated with operating the ETF, including custody of coins and trading. Additionally, a fee will be charged through the bid-ask spread whenever Bitcoin is traded.

When trading and management fees are stacked, Bitcoin issuers could generate billions of dollars yearly, especially if trading volume is high. By Kang’s estimation, Bitcoin ETF issuers might generate between $10-20 billion in annual fees.

However, this is subject to dominance. After the Securities and Exchange Commission (SEC) approves multiple spot ETFs, issuers, including BlackRock and Fidelity, are expected to wage an aggressive battle for market share.

The goal for issuers is not only to ensure that funds spent on advertising yield, but for every dollar spent, more is generated into the future. This is critical because investors are less likely to switch once they choose an ETF, making early dominance crucial for long-term revenue generation.

Is Bitcoin Ready For A 10X?

According to observers, issuers will promote Bitcoin at every opportunity. This is why ChainlinkGod while responding to Kang’s post on X, thinks Bitcoin will also likely track 10X in the sessions ahead since all issuers are “inherently long” on Bitcoin.

Looking at price charts, Bitcoin continues to edge higher, recently rising to as high as $45,800, according to price data. At this pace, BTC bulls extended gains of 2023. This will be as the community expects the SEC to approve the first Bitcoin ETFs. Even so, it is unclear when the agency will greenlight this product immediately.

Bitcoin price trending upward on the daily chart | Source: BTCUSDT on Binance, TradingView — Bitcoin price trending upward on the daily chart | Source: **BTCUSDT on Binance, TradingView**

BTC has critical support at around the $44,000 zone, marking 2023 highs. If bulls maintain prices above this line, the odds of the coin rising to $50,000 in a buy trend continuation pattern will likely increase.

Feature image from Canva, chart from TradingView

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.