All eyes are on the world’s largest economy for this highly-anticipated event.
“Uptober” is here, and bullish sentiment appears to be returning to the crypto market….or is it?
Are we about to see BTC blast through the $32K mark and continue ascending towards its all-time high of $69K, or are we in for another major price correction (and @CryptoCapo finally gets vindicated)?
We’re gonna find out in the coming weeks, but I’m in the former camp and am banking on some strong price growth soon, and here’s why.
To remain ahead of the game, keep an eye on BTC – let alone other crypto – prices in the lead-up to, on and shortly after this date range:
October 16th – 20th
What’s so significant about this period? It represents the second deadline for the US Securities and Exchange Commission (US SEC) to approve or reject a spot Bitcoin ETF, with most of these having a deadline on October 17.
Which entities currently have their spot Bitcoin ETF under review? Here’s the shortlist with relevant dates.
Various news sources have reported that Eric Balchunas and James Seyffart – two prominent Bloomberg financial analysts – claim that the probability of the regulatory body approving a spot Bitcoin ETF in 2023 sits at 75%. Two months ago, these analysts had that likelihood sitting at 65%.
If the SEC still refuses to approve an ETF, Balchunas and Seyffart are 95% sure we’ll see this fund in the USA by the end of 2024.
Mind you, with Gary Gensler – the current chair of the SEC – sticking around until June 2026 (unless he gets fired), it will be an uphill battle to get crypto-friendly regulations and financial products passed while he’s at the helm.
NEW: @JSeyff & I are upping our odds to 75% of spot bitcoin ETFs launching this yr (95% by end of '24). While we factored Grayscale win into our prev 65% odds, the unanimity & decisiveness of ruling was beyond expectations and leaves SEC w "very little wiggle room" via @NYCStein pic.twitter.com/IyEGmWjuHa
— Eric Balchunas (@EricBalchunas) August 30, 2023
Would I count on the SEC saying yes to these ETFs in October? I would say there’s a 60% chance this month and an 85% possibility by the third deadline if I had to mention arbitrary yet somewhat plausible likelihoods.
Think we’re all being too optimistic? For context, all of these companies have previously applied for this ETF and have constantly been rejected since 2020, and they (at least one of them) won’t stop until they get the authorisation.
With BlackRock’s ETF track record of 575:1, its proposed iShares Bitcoin Trust appears to be one of the frontrunners in this race, although all of these corporations should be getting approved.
Why is all of this a big deal?
A spot Bitcoin ETF will require these firms to physically hold all the BTC they offer. Thus, they will need to pay for these coins in full. This will likely lead to massive buy pressure and enormous price gains.
Assuming these ETFs get approved, it will generate much hype and should signify the beginning of the next market-wide bull run.
If history is anything to go by, this could lead to even higher price peaks than we experienced in this previous cycle. The crypto market peaked at ~$2.8 trillion in November 2021, not bad for an asset class that’s predominantly less than ten years old.
What is adding momentum to this movement is Grayscale’s winning its lawsuit over the SEC to force the regular to officially review the conversion of the former’s Bitcoin Trust (GBTC) to a spot Bitcoin ETF.
It filed the lawsuit against the SEC after the regulatory body denied Grayscale’s request to convert its GBTC to an ETF in June 2022.
With all of the effort, time, and, above all, money that’s gone into applying for and re-submitting revised paperwork from these abovementioned enterprises, I would bank on one thing:
It’s a matter of when, not if, The SEC approves a spot Bitcoin ETF.
The best part is once one of these businesses gets the all-clear, it will open the floodgates for other institutions. Moreover, I envisage establishing ETFs to expose prospective investors to specific altcoins or even a mixed portfolio.
The ridiculous thing is that other countries worldwide have authorised a similar product for retail and institutional investors within their borders, with the Purpose Bitcoin ETF in Canada reportedly being the world’s first fund involving physical BTC (as opposed to a Bitcoin Futures ETF).
In this article (see link below), I’ve covered the difference between the two and other products you can use to invest in BTC and altcoins indirectly.
Looking at the bigger picture, the USA gets its act together to offer as much regulatory clarity as possible for this asset class, let alone for companies and organisations involved in distributed ledger technology and the cryptocurrency space in general.
Why? A lack of regulations in recent years has been a catalyst for many US crypto companies – Ripple, Coinbase, Kraken, Bittrex, etc. – to expand their overseas operations, not to mention the high-profile and drawn-out legal battle the former has had to ensure with the SEC.
Bittrex shut down its US operations in April this year, providing the following reason in a press release earlier this year:
Bittrex is beginning the process of winding down its U.S. operations. Don’t worry – all customer funds are safe and available to withdraw; however, it’s just not economically viable for us to continue to operate in the current U.S. regulatory and economic environment.
Companies large and small – particularly the big end of town – have an appetite for getting sufficient exposure to this nascent and rapidly growing asset class and its underlying technology.
It’s quite a turnaround from 2018 when Larry Fink stated, “I don’t think any client has sought out crypto exposure” (much to the surprise of the interviewer), and comments about cryptocurrencies and “money laundering” to turn around in 2023 and praise Bitcoin and crypto.
Am I surprised by this? Absolutely not. Corporations have been into crypto for several years now, and many have intentionally downplayed it or – better still – tarnished its reputation at some point so that they can spook retail investors and exploit relatively lower prices to make significant gains, whether or not this involves shorting an asset.
Fortunately, many of you have been smart enough not to fall for this BS, have continued accumulating crypto over the years, and have taken profits along the way (to reinvest when a bear market returns, hopefully).
In conclusion, will “Uptober” mark the beginning of the next extended bull market?
There’s a strong chance, but I believe these might realistically start in early 2024. Nonetheless, prices have remained subdued, and various blockchain protocols and affiliated entities have continued improving their projects and forged new partnerships since the last bullish cycle in 2021.
How high can BTC get as we approach the 2024 Bitcoin Block Reward Halving? What about a potential bull market in 2025? I’ll leave you with PlanB’s recent thoughts and another chart to let you be the judge here.
Are you ready for April 2024 bitcoin halving?
Or do you think this time is different? pic.twitter.com/IlrPVErmuw
— PlanB (@100trillionUSD) September 19, 2023
- N.B. None of this is financial advice; I am not a financial advisor. You are ultimately responsible for your crypto investments, let alone in any asset class.
- The opinions expressed within this piece are my own and might not reflect those behind any news outlet, person, organisation, or otherwise listed here.
- Please do your research before investing in any crypto assets, staking, NFTs and other products affiliated with this space.
- For transparency, Bitcoin (BTC) accounts for roughly 20% of my crypto portfolio.
P.S. I have decided to write dates following the date notation used in the US, as this article primarily pertains to the country, and a large chunk of Medium readers are from the US (despite many of you hailing from other countries).
© Crypto with Lorenzo 2023. All rights reserved.