Andrew Kang, one of the leading names in the cryptocurrency trading world, recently shared his views on the current situation of Bitcoin (BTC).
Despite BTC recently rising to a one-year high of $46,000, Kang believes BTC is still undervalued given expected inflows from ETFs and excitement surrounding the upcoming halving event in 2024.
Kang argues that the market consensus regarding ETFs as long-term bullish for BTC is correct. However, he points out that the impact of ex ante ETF flows is currently under-considered.
To illustrate his point, Kang draws a comparison to gold ETFs, which have $120 billion in Assets Under Management (AUM) and an average expense ratio of 0.6%. This means a salary of 720 million dollars a year. The Net Current Value (NPV) of these fees is estimated to be between $10 billion and $20 billion.
From the day they launch, ETF issuers will compete for a share of this future fee pool. Kang emphasizes that every promotional spend spent in 2024 is worth ten times more than that spent in 2025 because clients tend to stick with their initial ETF choice.
In the asset management business, the value of a client increases over time, according to the analyst. As an example, Kang suggests that a young investor starting with a $1,000 investment today could potentially have a position worth $250,000 in 10 years, assuming he advances in his career and the BTC price increases.
Given the magnitude of the opportunity, Kang predicts an increase in marketing and advertising spend that could even exceed the size witnessed during the 2021 bull run.
*This is not investment advice.