Over the past few weeks, expectations have been high for a surge in the crypto market, spurred by the launch of the new Bitcoin Exchange-Traded Fund (ETF). With some influencers talking of a six-figure Bitcoin, the lure of quick and easy money seemed irresistible to some. The reality, however, was a modest increase in value, followed by a dip.
Unfortunately, the focus on price action took away from the significance of the actual event. The Securities and Exchange Commission (SEC) approval changes the future of the entire cryptocurrency market because it directly undermines their previous negative stance towards them.
While its chair, Gary Gensler, will undoubtedly continue his critical comments about crypto, the fact that the ETFs were approved en masse makes those views harder to justify. In recent years, Gensler has become a caricature of everything that’s wrong with crypto regulation in the US, and that hasn’t gone unnoticed by the politicians he has to explain himself to.
In particular, Gensler faces the challenge of reconciling the SEC’s endorsement of Bitcoin in ETFs while simultaneously engaging in legal battles with other crypto projects. The clock is ticking on his approach to regulation through enforcement.
The new ETFs differ from previous ones, which were based on futures contracts and didn’t hold actual Bitcoin. The fact that the new ETFs have Bitcoin signals the SEC’s recognition of it as a legitimate asset. This shift also allows the average American to invest in crypto through standard investment channels, such as 401(k) retirement funds.
While some expected an immediate surge in Bitcoin’s value following their launch, more experienced analysts predicted a gradual effect due to how people invest in ETFs. They also anticipate they will appeal more to long-term investors, which could help to reduce market volatility.
The role of BlackRock in the process is worth noting because they are known for working closely with regulators to help stabilize markets. As such, they were always unlikely to do anything to cause a sudden price spike.
A factor surrounding the approval most people have missed is how it will generally change the narrative around cryptocurrencies. For instance, BlackRock holds significant stakes in many mainstream media companies and won’t look favorably on heavily critical coverage of one of their products.
Whatever happens in the short term will probably be driven by the emotional swings of retail traders rather than the ETFs. Over the longer term, however, the value of Bitcoin and, consequently, most other cryptos will likely rise.
Also, we still have the halving to look forward to in April, following which the markets should heat up further to herald the arrival of the long-awaited bull market. However, this time, the money that flows into crypto could surpass previous bull markets due in part to the ETF approval.
While the changes ahead won’t be radical overnight pivots, they will bring crypto into more mainstream acceptance. Furthermore, when Elon succeeds in turning X into the ‘everything app,’ crypto will become as familiar as PayPal.
Against this backdrop, our development is continuing, and we look forward to celebrating the launch of the new features we’ve been working so hard on. The combination of our action-packed roadmap, the halving, a bull market, and the growth in NFT tokenization of real-world assets looks set to make this year one to remember.
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