Galaxy Digital Holdings Ltd. founder Mark Novogratz predicts Bitcoin surge, a rise in value by the end of the year. In a Bloomberg interview, he noted that Bitcoin is currently consolidating between the $28,000 and $32,000 range and mentioned that the digital currency is likely to advance further once the Federal Reserve concludes its interest-rate hikes.
Despite a slight 0.2% dip to $30,509 at 3:03 pm in New York, Bitcoin has experienced a significant surge of 18% in the past month and an impressive 84% gain this year. Much of this optimism stems from the potential approval of a Bitcoin exchange-traded fund (ETF) in the United States.
Novogratz acknowledges that the current supply pressure on Bitcoin is a result of individuals cashing out their profits. However, he remains confident that the approval of a Bitcoin ETF is inevitable. He believes that prominent financial firms such as BlackRock Inc. and Invesco will lead the way in introducing Bitcoin to a wider range of investors who previously had limited access to the asset class.
The approval of a Bitcoin ETF would be seen as a “seal of approval” from both the US government and the Securities and Exchange Commission (SEC), affirming Bitcoin’s status as a legitimate asset, according to Novogratz.
The interest in Bitcoin ETFs is not limited to Novogratz and Galaxy Digital. Major financial institutions such as BlackRock, Fidelity, and Invesco have also submitted applications to offer “spot” Bitcoin ETFs. These ETFs would be physically backed by actual Bitcoin, unlike previous offerings that were based on Bitcoin futures.
While the SEC has previously rejected spot Bitcoin ETF applications due to concerns about volatility and potential manipulation, the recent filing by BlackRock has sparked speculation that the SEC may change its stance. The filing coincided with a surge in Bitcoin prices, reaching a one-year high shortly after.
ETFs are part of the larger exchange-traded products family, but they are the most popular category within the $7 trillion industry. Crypto-native firms and traditional financial institutions alike are eager to launch ETFs that hold actual Bitcoin, as opposed to those investing in Bitcoin futures. Futures-backed Bitcoin ETFs have been available to US customers since 2021, but there is a growing demand for spot Bitcoin ETFs, which would open up the cryptocurrency industry to a wider range of investors.
The SEC’s reluctance to approve a Bitcoin ETF has been attributed to concerns about liquidity, manipulation, and the extreme volatility of Bitcoin. However, issuers and investors argue that spot Bitcoin ETFs could be made accessible to both retail and institutional investors, potentially expanding participation in the cryptocurrency market.
To address regulatory concerns, issuers such as BlackRock have proposed surveillance-sharing agreements to mitigate the risk of fraud and manipulation. Coinbase, the leading spot crypto exchange in the US, has emerged as a preferred market surveillance partner for ETF issuers.
The SEC’s recent request for additional information from issuers like BlackRock and Fidelity is seen as a positive sign that the approval process is moving forward. Crypto experts anticipate that at least one spot Bitcoin ETF may receive approval by the end of the year, marking a significant milestone for the industry.
Novogratz’s positive outlook for Bitcoin’s future, coupled with the increasing interest in spot Bitcoin ETFs from major financial institutions, suggests a growing recognition and acceptance of cryptocurrencies in traditional finance. If approved, these ETFs would provide a regulated and accessible pathway for investors to participate in the cryptocurrency market, potentially reshaping the landscape of digital assets.
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