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The bitcoin price was rocked this week by a viral, false report that a long-awaited bitcoin spot exchange-traded fund (ETF) had been approved by the U.S. Securities and Exchange Commission (SEC), causing ethereum, XRP XRP and crypto market mayhem even as the U.S. dollar teeters on the verge of "collapse."

Now, bitcoin and crypto price models have revealed bitcoin's market capitalization could soar should a U.S. bitcoin spot ETF be approved—potentially adding $1 trillion to the wider ethereum, XRP and crypto market value.

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MORE FROM FORBESBlackRock And JPMorgan Are Quietly Are Quietly Laying The Groundwork For The Next Bitcoin, Ethereum, XRP And Crypto Price Bull RunBy Billy Bambrough

"The next wave of bitcoin institutional adoption seems to be advancing mostly in the form of financial institutions providing access to bitcoin investing to their clients through ETFs," analysts with data company CryptoQuant wrote in a report, pointing to the likes of BlackRock BLK and Grayscale, which manages the Grayscale bitcoin trust (GBTC), as leading the charge.

Last month, $1.5 trillion manager Franklin Templeton filed with the SEC for a bitcoin spot ETF, joining a flurry of applications that was kicked off by the world's largest asset manager BlackRock in June and includes Wall Street giants Fidelity, Invesco Galaxy, WisdomTree.

Since then, the SEC has been instructed by U.S. lawmakers to reexamine Grayscale's application to convert its flagship bitcoin trust to a fully-fledged bitcoin spot ETF.

"The potential of fresh money entering the bitcoin market through these spot ETFs would dwarf the amount of money that flowed into the GBTC fund, the largest bitcoin fund in existence, in the last cycle," the researchers wrote.

They calculated that during the bitcoin price run from $10,000 to $64,000, "the GBTC fund saw its realized capitalization increase by $5.5 billion, only 4% of the potential $155 billion the launch of these spot ETFs could bring into the market."

Inflows to the bitcoin market of $155 billion, just 1% of the funds' total assets under management, could boost the bitcoin price to between $50,000 and $73,000, CryptoQuant predicted, with bitcoin's market cap increasing between 82% and 165%.

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MORE FROM FORBESU.S. Dollar 'Collapse'-Shock $8 Trillion Predicted Fed Inflation Flip To Spark A 'Critical' Bitcoin, Ethereum, XRP And Crypto Price Boom To Rival GoldBy Billy Bambrough

Last week, the U.S. SEC declined to appeal the court order directing it to look again at Grayscale's ETF application, with investors increasingly betting the crypto asset manager will eventually be successful.

"This news was well-received by investors, notably reflected in the narrowing discount of the Grayscale Bitcoin Trust (GBTC)," Matteo Greco, research analyst at crypto investor Fineqia, said in emailed comments, noting the discount narrowing trend began in mid-June 2023 when BlackRock filed for its bitcoin spot ETF—"back then, the GBTC discount was approximately 43%."

"The significant reduction in the discount over the past few months, following Grayscale's favorable outcomes against the SEC in court, reflects growing investor confidence in the possibility of Spot ETF approval in the future. Notably, the first final deadline for bitcoin spot ETF approval or denial is set for January 10, 2024, concerning the ARK 21Shares filing. Several other filings, including BlackRock's, have their next deadlines scheduled for mid-January, with the latest potential deadline set for mid-March."