Crypto Braces for a $4 Trillion Snowball Effect - Boosting ETH, Helium, Solana, Avalanche

The cryptocurrency market is bracing for major moves in the coming months as several important catalysts converge. The biggest catalyst of all will be the upcoming approval of a spot Bitcoin ETF, which is expected to happen on Wednesday.

This decision is expected to bring in billions of dollars to the Bitcoin market as demand from institutional investors rise. In a statement this week, an analyst at Standard Chartered estimated that the ETFs could attract between $50 billion and $100 billion in capital. The upper range is notable because Bitcoin now has a market cap of over $900 billion.

At the same time, the analyst noted that the approval will likely push Bitcoin price to $250,000 in 2025. If this BTC price prediction is accurate, it means that the coin’s market cap will surge to over $4 trillion, making it one of the biggest assets in the world.

Such a move will then boost other altcoins like Ethereum, Helium, Solana, and Avalanche. In the past, these altcoins have had a close correlation with Bitcoin. For example, most of them jumped to a record high in 2021 when Bitcoin hit $67,000. They also plunged in 2022 as Bitcoin moved below $20,000.

Still, it is worth noting that Bitcoin price will likely have some volatility in the coming days if the SEC approves an ETF. As I wrote on Monday, this situation is known as buying the rumors and selling the news. In a note, analyst from Wintermute said:

“Now with high market expectations of ETF approval, as seen with the rally to over 45k and six-month highs, people are hedging and reducing their positions with put buying and call selling, a reversal of the recent trend.”

While Bitcoin could drop in the coming days, there are other catalysts that could push its price higher in the coming months. First, from a macro perspective, the Federal Reserve, Bank of England, and the ECB are expected to start cutting interest rates in the coming months. Besides, inflation has continued pulling back in the past few months.

Second, Bitcoin will go through a halving event in April. Halving reduces the amount of block rewards and the rate of supply growth in the network. In most cases, Bitcoin price tends to do well ahead and after a halving event.

Finally, Bitcoin will likely become a part of a balanced portfolio now that it has survived key events in the past 15 years. It has survived the collapse of companies like FTX, Terra, Celsius, Voyager Digital, and Three Arrows. In this period, it has outperformed American stocks and other commodities. As such, with a Bitcoin ETF in play, many institutions will likely allocate some money to the asset.