For some months, the crypto community has rallied for the approval of a spot Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). Crypto firms like BlackRock, Grayscale, WisdomTree, and many others have taken the bold step of submitting proposals to the SEC, hoping that they might break the curse of disapproval from Gary Gensler. Thankfully, there’s a silver lining in our cloud of gloom, as the crypto community is hopeful that approval will come through in Q1 of 2024. Bloomberg’s senior ETF analyst, Eric Balchunas, has stated that there is a 90% chance of approval by January 2024.
“People asking me if we changed the odds of approval by Jan 10 (aka this cycle), the same odds we’ve had for months (before it was cool/safe).” Eric Balchunas
In the past few weeks, Bitcoin has seen a powerful uptrend in price as it rose above its $40,000 support. Many traders and technical analysts have also predicted that the crypto asset, Bitcoin, would likely see a $50,000 price before the end of 2023.
“Indeed, many analysts believe that the launch of the first spot Bitcoin ETF would kick start a bullish rally for the maiden crypto asset, potentially unlocking over $70 billion in new capital influx and leading it towards new highs.” – CoinMarketCap.
The days of biblical pestilence are over
Adam Back, CEO of Blockstream (a bitcoin-centric company), also shared his views on the effect of a Bitcoin ETF approval and how the forthcoming halving could propel the Bitcoin price to $100,000. He noted that the past few years have been like a “biblical” pestilence and plague for people and financial institutions, which has influenced the price of Bitcoin negatively, but 2024 portends a potential uptrend.
“There was COVID-19, quantitative easing, and wars affecting power prices. Inflation was running people up, and companies were going bankrupt. They have come up with cash, and sometimes they’ll sell the good stuff because it’s liquid, and Bitcoin is super liquid. It used to happen with gold, and I think that's been a factor for Bitcoin in the last couple of years.”
He went further to explain how bad actors in the crypto space also played a role in the downturn of Bitcoin price
“The wave of contagion, the companies that went bankrupt because they were exposed to Three Arrows Capital, Celsius, BlockFi, and FTX. That’s mostly done; we don’t think there are many more big surprises in store.”
Back suggests that the spot ETF approval would allow a large fraction of traditional markets and major fund managers to invest in crypto assets like Bitcoin, which in the past they couldn’t. A spot Bitcoin ETF could attract capital inflow in the crypto space and Bitcoin exposure for many types of funds.
“I think Bitcoin could get to $100,000 even before the ETF and before the halving. But I certainly think the ETF shouldn’t be undervalued in its influence.” Blockstream CEO, Adam Back.
In November, the founder of Galaxy Digital, Mike Novogratz, explained that a Bitcoin spot ETF would drive institutional investments in 2024, noting that the approval of a spot Bitcoin ETF is not a “matter of if but when.”
“As institutions get more comfortable, if the government gives its seal of approval that Bitcoin is a thing, you are going to see the rest of allocators starting to look at things outside of that. And so, money will flow into the space.” Mike Novogratz.
Why stop at $100k when we could get to $1M?
Samson Mow, CEO of Jan3 (a digital infrastructure company focused on expanding Bitcoin technology), believes that Bitcoin will likely reach $1 million due to the influx of institutional investors coming in 2024, but this cycle would be shorter than the previous ones.
“You’re hitting a very limited supply of Bitcoin on the exchanges and available for purchase with a torrent of money; this is why you can go really high all at one time. Given that we’re going to have billions and billions pouring all in at once on ETF approvals, I think it’s going to be a much shorter time,” said Samson Mow.
Mow also referred to former Coinbase CTO Balaji Srinivasan, who predicted that the price of Bitcoin would skyrocket to a million dollars. Earlier this year, Srinivasan made a $2 million bet with James Medlock that the price of Bitcoin would hit $1 million in 90 days.
Spot Bitcoin ETF is the biggest Wall Street development
Bitcoin advocate and co-founder of MicroStrategy, Michael Saylor, noted that a spot Bitcoin ETF could be the biggest wave in traditional finance since the S&P 500 index fund, which was introduced 30 years ago.
Like other analysts and Bitcoin enthusiasts, Saylor agrees that a spot Bitcoin ETF would create a platform for mainstream retail and institutional investors that previously couldn’t access a “high bandwidth compliant channel” to invest in Bitcoin.
“This ETF would be a major catalyst driving demand, followed by a supply shock in April when the Bitcoin halving event takes place. I don’t think we’ve ever seen a 2 to 10x increase in demand combined with a halving in the supply of a scarce, desirable asset that people want to hold for a long period of time. So I think we’re expecting 2024 to be a major bull run for the asset class.” Michael Saylor
Michael Saylor is recognised for his unwavering faith and support of Bitcoin. According to Buy Bitcoin Worldwide, MicroStrategy now holds 174,530 bitcoins as of November 30, 2023, which shows a 16,130 difference compared to how many bitcoins MicroStrategy held at the beginning of November—158,400. The average purchase price was $30,252, with a total cost of $5.28 billion.
“Our goal is to find a way to pursue more Bitcoin per share for our shareholders, whether that be through debt, equity, or cash flows from the business.”
Bitcoin ETF marketing wars kicks off
The euphoria of a spot Bitcoin ETF has led many asset managers to apply for one. Recently, crypto firms like 7RCC filed for a spot Bitcoin ETF, stating that it would include 80% Bitcoin and 20% carbon credit futures. Also, Bitwise published the first Bitcoin ETF advertisement on December 18, which featured the “Most Interesting Man in the World” by Jonathan Goldsmith. Crypto asset manager Hashdex also rolled out their advertisement: “Stocks aren’t crypto, fixed income isn’t crypto, precious metals? Nope, not crypto either.”
The crypto community sees this as solid proof that the ETF is a done deal, and marketing campaigns like these would help in onboarding institutional investors.