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The Bitcoin Spot ETF Boom: VanEck Forecasts $2.4 Billion Inflows In Q1 2024

The crypto market is on the brink of a potentially game-changing shift, as investment management firm VanEck predicted. In a recent analysis, VanEck forecasts a substantial inflow of funds into Bitcoin spot exchange-traded funds (ETFs), expecting more than $2.4 billion to be injected in the first quarter of 2024 alone.

This bullish prediction aligns with the anticipated launch of the first Bitcoin spot ETF in the US, which could positively change the crypto landscape.

Bitcoin Bullish Forecast

This forecast emerges against a backdrop where investors are increasingly gravitating towards ‘hard money’ assets, those which remain largely unaffected by the whims of US authorities, as indicated by VanEck

In this context, Bitcoin emerges as a particularly appealing option due to its “resilience” and limited correlation with conventional financial markets.

Despite the expected market volatility, VanEck’s analysts maintain strong confidence in Bitcoin’s market stance, projecting that its price will unlikely fall below the $30,000 mark in early 2024.

Bitcoin (BTC) price chart on TradingView

VanEck’s report delves further into Bitcoin’s future, highlighting the significance of the upcoming Bitcoin halving in April 2024. This event is anticipated to “proceed without a major fork or missed blocks” catalyzing a surge in Bitcoin’s value.

Unsurprisingly, the firm predicts that November 9, 2024, could witness Bitcoin attaining a new all-time high three years after its last peak.

Bitcoin cycle price peak.

VanEck added that such a milestone could even see Bitcoin’s mysterious creator, Satoshi Nakamoto, being named Time Magazine’s “Man of the Year,” particularly if Bitcoin reaches the $100,000 threshold.

Ethereum And Solana’s Rising Tide: VanEck’s Perspective On Altcoin Market Dynamics

In contrast to Bitcoin’s expected dominance, VanEck casts a different light on Ethereum’s future. The firm anticipates that while Ethereum will not surpass Bitcoin in market cap in 2024, it is likely to outperform every major tech stock.

However, Ethereum is projected to face challenges from other smart contract platforms like Solana, which present fewer uncertainties regarding scalability. VanEck’s analysis suggests that while Ethereum will show strong performance, it will lose market share to these emerging platforms.

The report also touches upon geopolitical implications for Bitcoin. Countries like Argentina are expected to follow El Salvador’s lead by sponsoring state-level Bitcoin mining and leveraging their energy resources.

This trend, combined with Bitcoin’s regulatory clarity and energy intensity, is predicted to draw attention from quasi-state entities in Latin America, the Middle East, and Asia.

According to VanEck’s insights, the post-halving period will see a market rally led by Bitcoin, with value eventually flowing into smaller tokens.

Lastly, VanEck casts a spotlight on Solana, predicting its rise to become a top-three blockchain by market cap, Total Value Locked (TVL), and active users. This ascent is anticipated to fuel Solana’s entry into the spot ETF wars, with a surge of filings expected from asset managers.

Featured image from Unsplash, Chart from TradingView

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Solana Price Could Reach $3,211 By 2030, VanEck Forecasts

SOL, the native token of the Solana blockchain, has been one of the biggest winners in the crypto market lately, delivering another positive price performance over the past week. This impressive price action reflects the increased interest in the altcoin and the recent shift in the climate of the general crypto market. 

Interestingly, asset management firm VanEck is amongst the latest entities showing interest in the Solana token and the altcoin’s prospects.

VanEck Predicts Potential 10,000% Rally For Solana

In a report published on Friday, October 27, prominent asset management company VanEck created different valuation scenarios for the SOL token. This price projection revolved around the current capability and potential of the Solana blockchain.

In a base case, VanEck believes that Solana can hold a 30% share in the smart contract market, a significant increase from the network’s current market share. Using this valuation framework, the asset manager projects SOL price to reach $335 by 2030.

Comparatively, Ethereum can achieve a 70% market share of value transmitted across open-source blockchains, according to the report. This projection makes $11,800 a possible destination for ETH’s price by 2030.

Nevertheless, VanEck presented a bull case for SOL in its analysis, putting forward a $3,211 price target for the altcoin in the best possible scenario. The asset management firm said:

Were Solana to avoid Ethereum’s event horizon and achieve Ethereum-like dominance, our bull case reveals $51.8B in revenues and a $3,211 price target in 2030.

It would take the Solana token a massive 10,000% price rally to reach $3,211 from the current price point. Now, it is worth mentioning that there was also a pessimistic scenario for SOL in the VanEck report, with the token projected to trade below $10 in a bearish case.

VanEck, one of the world’s largest asset management firms, has been an active participant in the cryptocurrency space over the past few years. The financial behemoth is one of the few companies looking to launch a Bitcoin spot exchange-traded fund in the United States.

SOL Price Overview

As earlier inferred, Solana has been on an upward trajectory over the past few weeks. Since initial concerns of a significant sell-off by FTX have subsided and the general market sentiment has improved, the altcoin’s price performance has been positive.

As of this writing, the SOL token is valued at $32.19, reflecting a 2% in the last 24 hours. However, the cryptocurrency has maintained most of its recent profits on the weekly timeframe, with a 14% price jump in the past seven days.

Solana

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Is The Ethereum Winter Over? L2 Exploding, ETH Futures ETF Launches

After sinking roughly 30% from 2023 highs, Ethereum appears to be bouncing off from the pits of the crypto winter. Looking at candlestick arrangements in the daily and weekly charts, the coin has primary support at around $1,500 and is firm, bouncing off with decent trading volume. 

At spot rates, ETH is up approximately 3% following positive developments sparked by the increasing adoption of its layer-2 scaling solution and the recent news that VanEck, a player managing billions of assets, is preparing to launch an Ethereum derivatives product.

ETH price on September 28| Source: ETHUSDT on Binance, TradingView

Ethereum Layer-2 Solutions Exploding

Taking to X on September 28, Alex Masmej, the founder of Showtime, believes that Ethereum’s layer-2 ecosystem has expanded to such an extent that it no “longer makes sense to build on other platforms.”

The development and deployment of Ethereum layer-2 solutions took center stage following network congestion, which forced gas fees to spike to record highs in the last bull run.

Developers have responded to the network co-founder Vitalik Buterin’s urging. The expert believes they are quickly constructing and deploying safe, universal platforms that have gained widespread popularity. 

Layer-2 platforms bundle transactions off-chain before confirming them on-chain, allowing for faster and more cost-effective operations while benefiting from the security of Ethereum. As of September 28, there were over 827,000 validators whose job is to confirm transactions and ensure that the network is secure, thanks in part to their geographic distribution. 

Ethereum validator count| Source: Beacon.in

Most layer-2 solutions use optimistic rollups, including Arbitrum, Base, and OP Mainnet. However, Masmej also said that once ZK rollups, which utilize zero-knowledge proofs to validate transactions without revealing sensitive data, are available, it will end the scalability trilemma, further boosting the capabilities of layer-2 solutions.

In the founder’s assessment, high throughput options, including Solana, will be a hedge. At the same time, Cosmos, which drives blockchain interoperability, will act as a long-term source of inspiration. Meanwhile, Ethereum will continue to flourish as Layer-2 options gain traction.

Rising TVL And ETH Complex Products Launching

According to l2Beat data, popular solutions like Arbitrum and Base, which offer faster and cheaper processing environments while remaining coupled with Ethereum and enjoying the pioneer network’s fast-move advantage, have larger total value locked (TVL). As of September 28, layer-2 platforms have a TVL of over $10.6 billion, more than Solana’s market cap, which stood at $8 billion, according to CoinMarketCap. 

Layer-2 TVL| Source: L2Beat

Beyond layer-2 adoption, ETH is being catalyzed by the news that VanEck, a global asset manager, is preparing to introduce its Ethereum futures exchange-traded fund (ETF). Specifically, the VanEck Ethereum Strategy ETF (EFUT) will invest in ETH futures contracts provided by exchanges approved by the Commodity Futures Trading Commission (CFTC).

Like the Bitcoin Futures ETF product, which is already being offered, the Ethereum derivative product will allow institutions to gain exposure, boosting liquidity.