Bitcoin made history this week, reaching another milestone of $67K—a long-anticipated all-time high. Although a short correction followed, similar to past record-breaking movements, analysts have now confirmed that the Bitcoin and crypto bull market cycle will continue. (Cryptopotato) Bitcoin is now looking more bullish than ever, and the market is taking notice.
This week marked the launch of the first official Bitcoin futures ETF. The ProShares Bitcoin Strategy ETF (known as BITO) launched on the NYSE this past Tuesday. While many speculated this could be a “buy the rumor, sell the news” event, Bitcoin performed astoundingly well upon the BITO launch. It is the first-ever Bitcoin futures-based ETF to trade in the United States and, within days, cemented itself as the second-highest traded fund in history. (CNBC)
This is just the beginning, as Valkyrie announced the release of its own Bitcoin futures ETF, hitting the NYSE market Friday, October 22nd. Leah Wald, CEO of Valkyrie Funds, pointed out the importance of ETF adoption as both an accelerator and a catalyst for crypto, saying, “it's further affirmation that U.S. regulators want to collaborate with the industry to regulate crypto assets rather than ban them.”
“The more products that come to market, the more awareness they bring and, hopefully, more adoption,” says Wald. “There are of course other filings for similar products, and it would make sense for them to come to market.” (Cointelegraph)
For several years now, investors have been speculating about the effect a Bitcoin ETF would have on the market. Many compare it to the launch of the gold ETF in 2004, which was the impetus for gold going from $400 an ounce to over $1,900 an ounce over the course of the next four years. The gold ETF gave institutional and retail stock investors a liquid way to trade gold, opening up a flood of liquidity that couldn’t previously and easily find its way into the precious metal-based commodity.
JP Morgan suspects that this new-gold narrative is more likely the cause behind Bitcoin’s recent meteoric rise. The bank attributes this to physical gold’s underperforming as an inflation hedge in the pandemic era, a time when the Fed keeps printing money to help stimulate the economy and commodity prices are skyrocketing. (Cointelegraph)
“By itself, the launch of BITO is unlikely to trigger a new phase of significantly more fresh capital entering bitcoin. Instead, we believe the perception of bitcoin as a better inflation hedge than gold is the main reason for the current upswing, triggering a shift away from gold ETFs into Bitcoin funds since September.” (Cryptopotato)
Paul Tudor Jones, CEO of Tudor Investments Corporation, supported these sentiments, saying that “Bitcoin would be a great inflation hedge.” The multi-billionaire revealed that he has Bitcoin in his portfolio and feels that Bitcoin is becoming superior to gold as an inflation hedge. Bitcoin’s use cases against inflation due to its algorithmic scarcity are now well known. As the CPI continues to reach some unprecedented heights, thanks to the ETF, even more investors can easily position their investments toward crypto.
“I do think we’re moving into an increasingly digitized world,” says Jones. “Clearly, there’s a place for crypto, and clearly, it’s winning the race against gold at the moment, right?” (Cryptopotato)
Jones joins the growing list of wealthy investors that are jumping on the crypto wagon, now including well-known names like George Soros of Soros Fund Management and Orlando Bravo of Thoma Bravo. Bravo spoke out about Bitcoin earlier this month, praising the currency as being “decentralized,” “frictionless,” and “borderless,” while pointing out his bullish sentiments. (Cryptopotato)
These developments are accelerating Bitcoin adoption. Digital Currency Group, the parent company of Grayscale Investments, just increased its authorization of shares of Grayscale Bitcoin Trust investments from $750 million to $1 billion. This triples the company’s current position, adding up to around $388 million worth of shares of GBTC. (SeekingAlpha)
California-based global investment company PIMCO is also getting into the crypto game. With a reported $2.21 trillion in assets under management as of December 2020, the firm announced that it would begin wading into the crypto space, starting with an interest in tools like futures. CIO Daniel Ivascyn spoke on behalf of the company, giving strong props to DeFi and its future potential.
“You have to understand decentralized finance, because it will be disruptive, and it very well may disrupt our industry, in our business in particular,” says Ivascyn, adding that the firm is “thinking about scenarios where this could take us to ensure that we are competitively prepared to deal with what’s a rapidly changing environment that offers a pretty significant value proposition, particularly for younger generations, or the new generation of the investment community.” (CNBC)
As these major firms make the crypto leap and the Bitcoin ETFs become established in the mainstream investment landscape, a new question arises: Just how long will the Bitcoin and crypto bull run last? The latest all-time high shows that this bull market cycle is already longer than the last one, which took place in 2017.
Many are speculating that the ETF was exactly the catalyst we needed to spark a supercycle, where we could have months—even years—of systemic crypto growth. The entire crypto market now holds steadily over $2.5 trillion. Could a $10 trillion market cap be on the horizon for this cycle? Where the entire crypto market cap can surpass that of gold? We’ll see.
The days of crypto being a passing fad are well behind us, and Bitcoin continues to plant itself firmly into the roots of our global economy. Highs and lows are expected along the way, as the digital asset becomes more established. The possibility of this being a true supercycle for Bitcoin is drawing investors in, even at these prices. In a rapidly advancing and growing economy, this all-time high is just the beginning of the next chapter for Bitcoin and the entire crypto market.
Top market movers as of October 22, 2021
- Solana (SOL) +36%
- Orchid (OXT) +35%
- Zcash (ZEC) +31%
- Nervos Network (CKB) +25%