The U.S. Securities and Exchange Commission took a critical step in approving the first-ever U.S. spot bitcoin exchange-traded fund, which has led cryptocurrency bulls to predict that bitcoin will soar to over $100,000 this year.
When the impacts of the adoption of a bitcoin ETF, which would expand the range of investors who can obtain exposure to the cryptocurrency, start to become more evident, some cryptocurrency investors predicted that the top cryptocurrency in the world would rise in 2024.
Since the news of the SEC ETF clearance broke, which saw the agency approve 11 products, the price of bitcoin has not changed significantly.
Changes to the rules that permit the establishment of ETFs were approved by the regulator, but they emphasized that this action should not be seen as an indication that the Commission will support listing requirements for securities backed by cryptocurrency assets.
Prices have responded to it significantly since the SEC’s action on Wednesday. On Friday, the price of one bitcoin was down about 0.4%, at $46,118.
It temporarily reached $49,000, the most since December 2021.
However, ETFs and other advancements in the cryptocurrency space are anticipated to propel significant price increases for bitcoin over time.
What’s a bitcoin ETF?
Through shares that are traded on a stock market, ETFs enable more retail investors people to indirectly own bitcoin. With more and more organizations like BlackRock, Fidelity, and others offering these products, investors anticipate that token acceptance may start to become more widespread.
SkyBridge Capital founder Anthony Scaramucci stated that within the past year, he has increased his exposure to cryptocurrencies such as bitcoin, ethereum, and solana.
Scaramucci stated at the CfC conference in St. Moritz that “he thinks this is a really big breakthrough for bitcoin as a digital asset, it’s a much broader story for digital property in general.”
He believes that bitcoin will most certainly reach its all-time high by year’s end and will see its all-time high by then.
Regarding the anticipated price of bitcoin, renowned investor Scaramucci stated that he believes it would reach $100,000 within the next year.
Is bitcoin going to reach $100,000, which is more or slightly more than double in the upcoming year? He does think so.
It should be noted, though, that he has a long history of being mistaken.
Digital gold
The approval of the token as an ETF was likened by him to the 2004 launch of the first spot gold ETF. Although it took years for that process to result in significant price increases, gold’s value eventually shot through the roof.
Since the SPDR Gold Shares ETF started trading in 2004, the value of the precious metal has increased by around 556%, to approximately $1,592.76, today. Bulls in the cryptocurrency space anticipate that bitcoin will move in a similar way, but much more quickly this time.
Digital gold, that’s how we see it, Scaramucci said. There is no reason why bitcoin couldn’t account for 50% or 60% of the $13 trillion market value of gold. So that suggests a 10x price over then next decade.
In the past, a lot of cryptocurrency investors have contrasted bitcoin with gold. It’s important to note, though, that although supporters think they share comparable characteristics, such as limited supply and resistance to outside economic and geopolitical challenges, bitcoin hasn’t quite lived up to the hype as “digital gold.”
previous price performance over the previous three years has revealed bitcoin trades in conjunction with stocks, in particular the tech-heavy Nasdaq, rather than gold.
In 2023, Bitcoin significantly outperformed gold, the Nasdaq, and a number of other risky assets.
However, the main factor driving the price of cryptocurrencies was anticipation that the Federal Reserve will curtail its aggressive rate hikes, which would favor riskier assets like cryptocurrencies.
Vice President of International Vijay Ayyar of the Indian cryptocurrency exchange CoinDCX stated that ETF certifications were “priced in for some time now.”
Bitcoin’s already gone from roughly $25,000 to nearly $47,000 since October.
According to Ayyar, the next big step will come when Bitcoin is bought for the ETF itself. That might occur within the next two to three weeks.”
Given that the Bitcoin halving is scheduled for April of this year, if sentiment is to be believed, we may be in for an accelerated advance to new all-time highs at some point this year, Ayyar continued.
2023 marked a turning point for bitcoin
If bitcoin attain those heights, it would signify an enormous turnaround for a sector that has been in a slump since the bankruptcy of FTX, the $32 billion cryptocurrency exchange, in 2022. Sam Bankman-Fried, the creator of FTX, was convicted guilty on all seven felony counts in the United States last year, according to federal prosecutors.
As a result of extremely high inflation and rising interest rates, the price of all digital currencies was plummeting precipitously by 2022, including bitcoin.
But after one of the biggest names in the field was exposed for using assets it held on behalf of customers to make risky trades in other crypto assets and risky derivatives linked to crypto, FTX’s collapse sowed deep mistrust in the crypto industry among investors, regulators, and consumers.
A little more than $2 trillion was removed from the market capitalization of the cryptocurrency market as investors withdrew their holdings of digital tokens in large quantities.
But in 2023, things were different. Over the course of the year, the price of Bitcoin more than doubled, with a 152% increase in value for the unit. The price of other digital tokens increased as well. The price of ether nearly doubled, and ada, solana, and XRP all saw significant increases.
We had the worst year ever in 2022, yet the best year we had was in 2023. In other words, Scaramucci remarked, it’s been the greatest and worst of times.
Additionally in 2023, as part of a $4.3 billion settlement with the Department of Justice, Changpeng Zhao, the founder and CEO of Binance, resigned from his position after entering a guilty plea to criminal charges. For many cryptocurrency investors, this is an opportunity to move past misbehavior in the market and make a clean break.
Executives in the industry are predicting the beginning of another bull run. They claim that the bitcoin “halving” is another cause that will propel advances in 2024, in addition to the adoption of a bitcoin ETF.
The halving is a built-in event in the bitcoin code, occurring every four years. Half of the profits that so-called miners receive for mining bitcoin are kept. This maintains a limit on the amount of bitcoin available, which will never exceed 21 million. In past bitcoin price cycles, a halving occurred before a surge in price.
$250,000 by July?
Draper Associates founder Tim Draper thinks the halving of bitcoin might push the price to $250,000 by July, among other reasons. According to the billionaire investor, the much-awaited half of the bitcoin token is propelling it to a new all-time high, and he sees more acceptance of the cryptocurrency among regular investors.
Bitcoin is currently being supported by the halving and increased use of a reliable, decentralized, worldwide money that stores value anywhere, according to Draper. Draper’s main point is that, starting in 2024 and going beyond, women will be the ones driving bitcoin adoption.
According to the investor, in the event of a dollar run, women will begin to realize how important it is to have at least some bitcoin. It’s important to note that Draper, who made his initial bitcoin investment in 2014, was incorrect about the direction of the token’s price.
He predicted that bitcoin would hit $250,000 by June 2023, as he told in late 2022. Then, in July 2023, Draper stated that investors would need to wait a little longer—possibly two years—for bitcoin to reach his $250,000 goal.
And although Draper has made winning investments in Skype, Baidu, Tesla, and other companies, his overall record in venture capital hasn’t been flawless.
Theranos, the contentious blood-testing firm that failed after its CEO Elizabeth Holmes was charged with investor fraud, was previously backed by the investor. Rather than confront her, Draper reaffirmed his backing for the businesswoman, stating that he thought detractors had “taken down another icon.”
Not all investors, though, share Draper’s enthusiasm for bitcoin. According to Tom Lee, managing partner at Fundstrat Global Advisors, bitcoin may reach $150,000 in the upcoming year and $500,000 in the following five years, he said on Wednesday.
Additionally, Meltem Demirors, the chief strategy officer of CoinShares, told that she believes bitcoin can hit the $100,000 level. She made this statement in answer to a query on a hack that resulted in the SEC uploading fake information late on Tuesday claiming that the ETFs had been approved.
Demirors noted two important factors for her belief that we would surpass six figures by the end of the year: the adoption of a bitcoin ETF and the purportedly upcoming “halving” event.
