As Bitcoin surges past the $36,000 mark, driven by mounting anticipation of Exchange Traded Fund (ETF) approval, a broader audience of investors, and the visionary insights of industry experts, including those of MicroStrategy Chairman Michael Saylor, the cryptocurrency market is poised for transformative changes. With the potential green light for ETFs, wealth managers seeking exposure to the crypto space, and Saylor’s bullish outlook, Bitcoin is undoubtedly at a crossroads.
Bitcoin has recently skyrocketed to an 18-month high, reaching $36,856 in Asian trading hours on Thursday. The surge in value is attributed to growing optimism about the potential approval of ETFs to invest in the world’s largest cryptocurrency. According to Bloomberg Intelligence analysts James Seyffart and Eric Balchunas, the U.S. Securities and Exchange Commission (SEC) has a window of at least eight days to issue approval orders. Even if approvals don’t arrive this month, they estimate a 90% chance of approval by 10th January.
This unprecedented rally has been fuelled by a number of factors, including the ETF expectations. Market analysts, such as Josh Gilbert from eToro, note that bets on the US Federal Reserve halting rate hikes and the upcoming Bitcoin halving in the next year have also played pivotal roles in this crypto surge.
Matt Hougan, Chief Investment Officer of Bitwise Asset Management, emphasises that ETF approval is far from being priced into the market. According to Hougan, the majority of advisors, who are the natural audience for these ETFs, don’t expect approval until 2025 or later. ETFs, once approved, are poised to open the doors to a broader range of investors, especially financial advisors who manage a substantial portion of the U.S. wealth.
Currently, only 20% of self-directed retail investors have invested in cryptocurrencies, leaving a significant untapped market controlled by financial advisors and institutions. Hougan draws a parallel to the launch of gold ETFs in the early 2000s, which led to eight or nine consecutive years of gold price increases.
The impact of BlackRock’s filing for a spot Bitcoin ETF in June cannot be understated, dispelling negative sentiment from events like the collapse of FTX. This filing, along with supportive remarks by BlackRock’s CEO Larry Fink, reassured the market and has contributed to the current optimism surrounding ETF approval.
MicroStrategy Chairman Michael Saylor envisions an even brighter future for Bitcoin as he revealed in an interview earlier this week. Saylor predicts that the demand for Bitcoin will double after the forthcoming halving and the SEC’s approvals of spot Bitcoin ETFs. He emphasised that the supply and demand for Bitcoin are currently in balance but foresees significant price surges in the near future. According to Saylor, the next 12 months will be “pretty auspicious for the asset class.”
Saylor’s optimistic outlook isn’t limited to doubling demand; he believes that Bitcoin’s price could eventually reach an astonishing $5 million per coin. He identifies three massive catalysts for this acceleration: the approval of a spot ETF, the integration of Bitcoin into banks for custody and lending, and the ability for businesses to mark their Bitcoin investments on their balance sheets based on fair value.
These scenarios converge to highlight Bitcoin’s rapidly evolving landscape. With the impending potential for ETF approval, financial advisors and institutions eyeing the market, and Saylor’s grand vision, Bitcoin’s journey is more exciting and unpredictable than ever before. As the cryptocurrency market continues to mature, the next few years look set to reshape the financial world as we know it.
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