The highly-awaited spot Bitcoin (BTC-USD) has arrived, with nearly a dozen options now available to investors of all shapes and sizes. Accordingly, with an expected Bitcoin halving event anticipated later this year, bulls certainly have their fair share of catalysts to point to right now.
Bitcoin’s uniqueness lies in its scrutinization by numerous independent developers, security experts, and cryptographers, ensuring superior security and immutability compared to other networks. As the Bitcoin network grows, so too should its security and scalability (at least in theory). How more investor capital flooding into this asset will make things (better or worse) appears to remain up for debate.
Let’s dive into what these spot ETF approvals mean for Bitcoin moving forward.
Bitcoin ETF Officially Approved
The SEC approved several spot bitcoin ETFs after much anticipation. Bitcoin briefly hit $49,000 post-launch but has since given up a good portion of its gains. Notably, newly-launched bitcoin ETFs saw mixed results on their first trading day, with the SEC green lighting 11 issuers. Grayscale got NYSE approval to uplist GBTC. This follows the Chicago Board Options Exchange approving all six BTC ETF applications.
With the SEC approval, various spot bitcoin ETFs commenced trading on Thursday, generating significant excitement amid expectations of increased institutional investment. Industry experts predict a transformative shift, making bitcoin a mainstream portfolio asset. Issuers revealed fees, ranging from 0.2% to 1.5%, in updated filings on Jan. 9 and 10.
Approval Opens Opportunities
With bitcoin ETFs now openly trading on U.S. markets, previously-restricted large money managers now have access to the leading digital currency. Analysts at Standard Chartered forecast fund inflows of $50-$100 billion in 2024, potentially opening floodgates for the $30 trillion wealth management industry.
Bitcoin has become a benchmark asset for the younger generation, according to Anthony Pompliano, founder of Pomp Investments. The cryptocurrency surged 150% in 2023 after a challenging 2022.
Much of the investment sector had avoided the 2023 rally due to warnings about crypto’s unregulated nature. VanEck CEO Jan van Eck noted fiduciaries and financial institutions were instructed to avoid crypto. This changed on Wednesday with the SEC’s approval of spot bitcoin ETFs, enabling investors to acquire bitcoin similar to stocks and bond index funds. Despite stern warnings from SEC Chair Gary Gensler, crypto investment activity remains unaffected.
BTC Catalysts in the Long Run
Despite potential pressure post-ETF approvals, Bitcoin’s price may rise with three upcoming catalysts. ETF greenlights ease institutional accumulation, Ark Invest’s Cathie Wood foresees $1.5 million, and Fidelity predicts $100 million by 2035 and $1 billion by 2038.
Long-term predictions may seem overly optimistic, but the approval of Bitcoin ETFs is likely to establish a price floor, stabilizing its volatility. This stabilization could attract significant investors, potentially pushing Bitcoin toward its previous highs. Coin Price Forecast suggests a more moderate estimate of $240,000 by the end of 2035.
Additionally, Bitcoin’s halving, occurring every four years, reduces mining rewards, impacting companies like Marathon and Riot. Despite increased mining costs, this event is expected to drive Bitcoin’s market price higher by limiting the available supply. The next halving is anticipated in the first half of 2024.
Persistent inflation may lead investors to seek Bitcoin and gold as hedges against fiat devaluation. Countries grappling with hyperinflation might follow El Salvador’s lead, potentially enhancing Bitcoin’s status as a safe haven asset. While Bitcoin may experience short-term volatility, focusing on long-term catalysts could yield triple-digit gains over the next decade.
Investors viewing the recent post-ETF approval pullback as a buying opportunity could benefit.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
