Bitcoin was able to reach $8,500 a few weeks ago because of the market’s anticipation of the possibility of having a crypto-related ETF. Unfortunately, things didn’t pan out how most investors expected. The application by the Cameron and Tyler Winklevoss was denied for the second time by the US Securities and Exchange Commission over concerns of price manipulation. In addition to this, the SEC then decided to postpone its decision to approve Bitcoin ETFs.
Right after this news, altcoins along with Bitcoin suffered losses. In fact, $9 billion was instantly stripped from the cryptocurrency market right after this news. As Bitcoin is simply floating around $6,300 as of writing this article, you can’t help but wonder if it’s a good decision by investors to sell their shares.
For cryptocurrency hedge-fund manager Dan Morehead, he says that investors are actually overacting. He mentioned that “I still think it will be quite a long time until an ETF is approved. The last asset class to be approved for ETF certification was copper, and copper has been on earth for 10,000 years”. He actually does have a point. In fact, an ETF that was backed by gold only happened in 2003. And in the next decade, it has been able to spike the asset’s value by up to 300%.
He actually added that “The main thing to remember is that bitcoin is very early-stage venture, but has real-time price feed — and that’s a unique thing. People get excited about the price and overreact”.
SEC is Cautious
Dan Morehead never saw anything special regarding the decision of the SEC to reject crypto related ETFs. In fact, he mentioned that “The ETF rejection is the same story we’ve had for five years”. He also added that “The SEC has been very cautious with an ETF”.
Morehead thinks that the market should be optimistic instead regarding other developments in the crypto world. For instance, you have Bakkt, which is a partnership between Microsoft, Starbucks and Intercontinental Exchange. Morehead mentioned that “That’s huge news”. He added that That is going to be a very profound impact over the next five or 10 years for the markets, and, to my mind, that’s what people should be focused on”.
He also crunched the numbers to further make his point. Morehead mentioned that though Bitcoin is down, it is still up by 82% year over year. He mentioned that “it’s all perspective”.
Will there actually be a chance that we are going to see a Bitcoin ETF soon? If this scenario happens, this could actually increase interest in the market. And also, there is a chance that the institutional investors are going to play a role in the next bull run. Since the beginning of the year, many are anticipating when institutional investors are going to get involved in the crypto market. Regulatory clarity is slowly happening though no one exactly knows the direction where this is going. No one can actually tell whether or not the SEC will decide to have an ETF. Even if experts are saying that VanEck and Solid X has a strong chance of getting approved, as mentioned by Morehead, the agency is cautious with ETFs in general.