In the financial corridors, whispers are growing louder that should the United States Securities and Exchange Commission (SEC) nod to a Bitcoin exchange-traded fund (ETF), the value of the premier cryptocurrency could hit a staggering $185,000, leaping more than 6x its current rate.
As of August 30, Bitcoin is hovering slightly below the $30,000 mark. However, it’s standing its ground steadfastly against the tides. During a CNBC dialogue, Tom Lee, a frequent commentator on Bitcoin’s price trajectory, provided a perspective causing ripples. Lee posited that approving a spot ETF would absorb Bitcoin’s daily supply. With demand heavily outweighing supply, this imbalance would be the dynamo pushing the coin’s price to the vicinity of $185,000.
Zooming out, Bitcoin’s roller-coaster journey is well documented. Despite witnessing a drastic plunge over the last 20 months, it’s still the undefeated champion in the crypto arena based on market cap. Bitcoin’s value soared to a whopping $69,000 in its heyday before the winds changed in 2022. A massive selloff was triggered, dragging its value to below $16,000 in November 2022. But like the phoenix, Bitcoin rebounded, registering a 50% climb from its November doldrums and hitting north of $31,000 in July 2023.
With bated breath, the crypto community now has its gaze fixed on the SEC, the stern gatekeeper of financial regulations. The SEC has previously brushed aside pleas for a direct ETF derivative mapping Bitcoin prices. Although a nod was given for a Bitcoin Futures ETF, the crypto industry’s clamor is for a direct spot BTC ETF.
After the landmark August 29 court verdict backed Grayscale’s stance that their Bitcoin spot ETF was insulated against market manipulation, the crypto fraternity was buoyant. The SEC faced a setback, but the court refrained from steering them toward approving the ETF. However, after witnessing Bitcoin’s price catapult from $25,800 to $28,000 post-verdict, a growing cohort believes the SEC is cornered and might yield to the ETF pressure sooner rather than later.
To thicken the plot, on August 30, Bloomberg’s senior ETF analysts, Eric Balchunas, and James Seyffart ratcheted up their projection of an SEC approval for a spot ETF in 2023 to 75%, a jump from their earlier 65% estimate. If 2023 remains barren, they project a 95% chance for the green light in 2024. Their optimism springs from the court’s recent unambiguous stance in the SEC vs. Grayscale duel, which trapped the SEC and dealt them a PR blow, thanks to the media frenzy.
Bitcoin’s fate hangs in the balance in this unfolding drama, with the SEC holding the strings. The crypto world watches, waits, and wonders.
