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- A Bitcoin spot ETF approval is likely to trigger a new bull market, said Bernstein in a new investor note.
- The investment firm said institutions were “entering the cycle pre-hype” for the first time.
Happy Monday!
The approval of a Bitcoin spot exchange-traded fund may trigger a new bull market, Bernstein wrote in its latest digital asset report.
The investment firm made the comments as Bitcoin jumped past the $30,000 mark over the weekend.
Let’s dive into it.
Bitcoin catalyses new cycle
The approval of a Bitcoin spot ETF will be a catalyst “for a new cycle” that will bring “legitimacy to liquid tokens,” Bernstein analysts wrote in the firm’s latest note to investors.
At the same time, they said a nod from the US Securities and Exchange Commission will make it “acceptable for institutional investors” to trade in these products.
“Institutions are for the first time, in the history of crypto, entering the cycle pre-hype and this is healthy,” the report said.
ETFs offer investors an affordable and convenient way to bet on the performance of stocks, commodities, and cryptocurrencies. They also tend to be highly liquid.
While the SEC has not approved any Bitcoin spot ETFs so far, Bernstein suggested that such an approval could happen by January 2024 “if not sooner.”
Its analysts backed up their assessment by pointing to investment firm Grayscale having won its courtroom clash with the SEC in August.
They also said SEC Chair Gary Gensler recently has “toned down in his comments (from the days he called the entire industry ‘hucksters.’)”
A third bullish sign was that, BlackRock CEO Larry Fink went on Fox Business last week to say recent Bitcoin prices movements indicated a “pent-up interest” in the asset, analysts said.
“Whether you agree or not [with Fink], it is probably at least time to pay attention,” said the Bernstein report.
Bernstein analysts said the price of gold jumping by about 2.5% as the Nasdaq dropped by 3.5% could be another indicator that a Bitcoin bull market is imminent.
“Usually, we have seen Bitcoin-gold correlation spike up during periods when more investors seek [a] safe haven,” the analysts wrote.
“Bitcoin has a much stronger narrative this time, with institutional interest, easing of regulatory headwinds and considering how bearish investors have been on crypto all through this [year.]”
Crypto market movers
- Bitcoin is up 2.3% in the last 24 hours and now trading for $30,600.
- Ethereum is up 2.6% in the same period, changing hands for just over $1,680.
- Chainlink and Polygon have made significant gains; their tokens went up 11% and 8.9% respectively in that span of time.
What we’re reading
- After court victory, what’s next for Grayscale’s Bitcoin ETF? — DL News
- Is Crypto Funding Terrorism? — Milk Road
- How Larry Fink learned to love Bitcoin — a timeline of BlackRock’s crypto evolution — DL News
- Genesis bankruptcy stalls as creditors complain about ‘Kafkaesque’ process — DL News
Tom Carreras is a Markets Correspondent at DL News. Got a tip? Reach out at tcarreras@dlnews.com