The Catalyst: Bitcoin Spot ETFs Approved

Did Bitcoin just cross the rubicon? Is it now officially a BoomerFi-ed asset? A legitimate financial asset in the U.S. financial system? Yes. In the wake of the historic approval of the first Bitcoin Spot Exchange Traded Funds (ETFs), the market finds itself at yet another critical juncture. Flat lining on the news of SEC approval.

Let’s analyse shall we? Both tech stonks and crypto had a great 2023, back to near all time highs. Bitcoin itself surged 163% in 2023, rebounding sweetly from the 2022 FTX saga lows.

While debates arise on whether the debut of Bitcoin ETFs signal the top of the 2023 bull cycle, it’s important to maintain a measured perspective on the evolving world market. The big enchilada? Bitcoin is now accessible on the U.S. stock market, trillions of dollars.

Now, financial advisors with short and long time allocation horizons, tens of millions of retirement accounts; can entertain crypto exposure in their portfolios. 1-5-10% or more. Bitcoin exposure could serve as both a risk diversifier and a performance enhancer.

But Bitcoin is down? Why? As usual, a nice combination of fear and uncertainty, plus a healthy helping of people taking profit. Grayscale played a role, with approval to convert its GBTC fund that already has $28 billion in assets under management into it’s spot ETF.

Spot Bitcoin ETF Volume Source: The Block Data

While we ponder the price trajectory forward, perhaps looking at the chart below (Disbelief: This a sucker’s rally.) A steadfast belief echoes within the crypto community – the initial stages of the bull market are unfolding.

Psychology of a Market Cycle - Not Financial Advice, Please Read Disclaimer Below.

As we enter 2024 at around 60/100 - Neutral/Greed Crypto Fear & Greed Index uncertainty, increasing notes of cautious optimism prevail on crypto twitter. Despite the potential for sharp volatile market fluctuations that introduce an element of fear, the overarching sentiment remains positive.

The largest players in traditional finance just bought Bitcoin within the fold. The creation and U.S. SEC approval of highly liquid, highly accessible spot ETFs, mirroring the tactics applied to the gold market with the approval of gold ETFs in 2004. Today, gold is priced at around A$3,085, up well over 350% on a nearly 20-year timeframe.

The most anticipated aspect of this ETF lies in its potential to revolutionise access to Bitcoin. Essentially, BTC is now available on the NASDAQ, backed/provided by the largest institutional money management firms in the history of mankind. Bullish?

Did you know the Winklevoss twins sought approval for a Spot Bitcoin ETF back in 2013, encountering a prolonged denial from the SEC that spanned over a decade. Unlike big old BlackRock, who submitted its application and secured approval within a mere six months. Circumstances that raise intriguing questions as to the nuances of the U.S. regulatory landscape.

Diving deeper, the underlying fear for the crypto community is that this is blurring the line between the traditional financial system and the decentralised world of permissionless peer-to-peer money.

Where believers see Bitcoin as a way to escape the global fiat debasement. Many on Wall Street will be buying with fiat to earn more fiat. Just another quick call with your broker.

Regardless of fears that may arise, there is a collective anticipation in crypto that, by the close of the year, the market will experience a glorious resurgence, potentially reaching or surpassing its all-time high in both Bitcoin's market capitalisation and the alt-coin ecosystem.

This outlook rests on the understanding that the world is rapidly evolving. Central bankers and governments worldwide are heavily tied to the ongoing fiat currency debasement, also known as the "brrr" of the "infinite" money printer.

As this narrative remains an underlying point for a renewed inflow of capital into crypto. BlackRock’s CEO Larry Fink put it best, “a flight to quality”. Hopefully one that can break the cycle and Update The System.

Video Source: Break The Cycle | Update The System

“An ETF in the US is the best combination of things you could possibly have. The world's best capital market and the world’s best financial innovation product ever created. It's an ETF in the US, and it's got a great narrative, and all the big boys are joining.” - Beimnet Abebe, Director, Principal Trading at Galaxy Digital

The year 2024 will be a continuation, another great chapter in the ongoing story of the digital revolution. One should be prepared for a journey of fluctuations, bumpy and unpredictable. However, we may soon find ourselves on the cusp of new all-time highs once more, ready to explore the boundless possibilities in the ever-evolving world around us.