Bitcoin has been buoyed by a wave of optimism for several weeks. This is related to the possible authorization, in the United States, of an investment that could further normalize this asset in the eyes of investors.
The price of the first digital currency by capitalization ($670 billion) has doubled since the beginning of the year and has increased more than 30% since the end of August. Bitcoin briefly surpassed $35,000 last week.
It is driven by speculation surrounding the creation of a bitcoin index fund (ETF), an investment product that would directly track the price of the cryptocurrency. This “Bitcoin ETF spot” would allow a larger portion of the general public to invest in cryptocurrencies without having to purchase them directly.
Rush into crypto assets?
At the end of October, a federal appeals court in Washington confirmed a decision, handed down at the end of August, that favored the asset manager Grayscale against the policeman of the American markets, the SEC, which had refused to authorize its ETF. .
Therefore, the SEC will have to re-examine the application. And the regulator also has other files on the table, including that of the asset management giant BlackRock or, more advanced, that of Ark Invest and 21Shares, whose final decision is expected by January 10 at the latest.
Acceptance of such an investment would trigger a flood of crypto assets, Morris said, but “slowly, over a long period of time,” similar to what happened when a spot gold index fund was approved at the turn of the millennium.
Companies requesting the creation of an index fund are already increasing prices, because the latter must have a certain threshold of bitcoins before the launch of such a product, says Michaël van de Poppe, founder of the MN.Trading platform, interviewed by AFP . A bitcoin ETF spot would also position the cryptocurrency as “a legitimate and reliable asset,” Felix Hartmann, partner at the firm Hartmann Capital, told AFP.
More accessible
There were already several cryptocurrency investment vehicles that didn’t require you to own them, including GBTC, a fund from asset manager Grayscale that invests in bitcoin but is not an ETF and does not directly track the price of the currency.
And the Bitcoin ETF spot will be accessible to “a segment of the population that has been completely underserved until now,” where traditional investment funds are reserved for “high net worth individuals,” Hartmann notes. For the expert, its creation would represent a “big step,” which would open “the doors to significant institutional adoption.”
Given that most of the proposed projects are “quite similar,” “it would be reasonable to assume that the SEC would approve several at once,” says Sui Chung, who runs CF Benchmarks, a specialized company that provides market data to seven applicants for the creation of one Bitcoin ETF position among eleven, including BlackRock. Enough to “open the way to the launch of ETFs that follow other cryptocurrencies”, such as Ether, adds the general director to AFP.
Bankruptcies and scandals
In an uncertain geopolitical context, some investors also tend to turn to crypto assets, although known to be volatile, as a safe haven, BlackRock CEO Larry Fink recently said.
“The rally we are seeing in October seems linked to a single catalyst: the enthusiasm generated by a possible approval” of the Bitcoin spot ETF, said Clara Medalie, an analyst at digital asset data provider Kaiko.
This perspective breathes a breath of hope into a sector marked by its share of bankruptcies and scandals, while the trial of Sam Bankman-Fried, former head of the cryptocurrency exchange platform FTX, takes place in New York, accused of having illegally used the funds deposited by their clients without their knowledge. This issue, and others like it, caused an exodus of capital invested in crypto assets at that time.
Source: BFM TV
