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- Crypto becomes the new flight to quality.
Crypto becomes the new flight to quality.
The boomers are coming for Bitcoin.
Welcome to the CryptoKey newsletter! Unlocking key analysis of the crypto space. All signal, no noise. Let's dive in!
Key Topics:
Crypto markets are heating up with Bitcoin leading the way, up 107% YTD in the face of an increasingly uncertain macroeconomic and geopolitical backdrop.
The Fed appears to be nearing the end of their rate hiking cycle and Bitcoin has started to price it in.
A Bitcoin spot ETF approval is imminent as crypto becomes a “flight to quality”, according to BlackRock CEO, Larry Fink.
The US Government continues to spend like there is no tomorrow, which is exactly what crypto is here for.
Spot Bitcoin ETFs are Coming - The Boomers (finally) Want Bitcoin
JUST IN: BlackRock CEO Larry Fink says crypto will play a role as a flight to quality.
— Watcher.Guru (@WatcherGuru)
8:20 PM • Oct 16, 2023
The entire crypto market has grown from zero to $1.3 Trillion in just 14 years, however investing in the space is still largely viewed as the wild-west from the legacy, boomer-driven financial world due to the nascency and broad lack of knowledge of this emerging asset class. The crypto markets have been waiting for a US-based spot Bitcoin ETF for the past decade, dating back to the Winklevoss twin’s first application back in 2013. A Bitcoin spot ETF would provide more traditional investors with a safe and regulated investment vehicle that would unlock massive amounts of capital from outside the crypto-native and retail cohort that makes up most of the current crypto market. Morgan Creek Capital founder Mark Yusko says that he believes $300 billion worth of capital could flow into Bitcoin once a spot-based ETF is approved.
The price of Gold went up for 11 straight years after the spot Gold ETF (GLD) launched. @reflexivityres
Crypto is here to stay, we have seen growing bipartisan support and 50 million+ Americans now reportedly own crypto assets. Despite the ever-increasing demand, every single spot Bitcoin ETF application has been denied (or delayed) by the SEC for various vague and arbitrary reasons. The SEC, led by henchchairman Gary Gensler, has been incredibly hostile towards regulating crypto, exhibiting blatant overreach of their authority and regulation strictly by enforcement while providing zero regulatory clarity to industry participants in the process.
ARK Investment’s Cathie Wood, who’s fund is in the running for a spot Bitcoin ETF approval, has said Gary Gensler is "STANDING IN THE WAY" of a Bitcoin ETF
However, things began to heat up when BlackRock, the largest asset manager in the world, filed an application for a Bitcoin Spot ETF this past summer. Followed shortly after were additional submissions from Fidelity, VanEck, Invesco and several other legacy financial powerhouses. BlackRock CEO Larry Fink, who previously dismissed Bitcoin as an “index of money laundering” just a few years ago, officially put the signal out that Wall Street is coming for magic internet money. BlackRock’s previous ETF application approval record is a staggering 575-1. Fink is one of the most powerful and influential people in the world and has close ties with just about every regulator and agency in the US (and around the world for that matter). BlackRock does not mess around and they have close to $10 Trillion AUM to prove it.
Although anything can happen, the SEC seems to be out of options and will likely be approving several spot Bitcoin ETFs in the coming months.
With the recent push from the big boys of finance, several embarrassing losses in court against crypto firms, and even bi-partisan letters from congress calling on Gensler to step aside, the SEC seems to be out of options. Industry players have become increasingly optimistic and vocal that several spot Bitcoin ETFs will be approved in the coming months.
VanEck CEO sees “movement at the [US Securities and Exchange Commission] now, where there was absolutely no movement until a month ago.” (Blockworks)
“Multiple, if not all, will launch at once” as the SEC will likely try to avoid being a kingmaker and cherrypicking the first. Competition among these products will be fierce as it will be a race to zero in terms of fees.
“(We) will fight like cats and dogs to win Market share” -- Mike Novagratz referring to his firm Galaxy Digital and all others who are working to bring their products to market.
The writing is on the wall and the price of Bitcoin over recent months has started to reflect it. If all goes smoothly, we should expect Ethereum and other crypto asset spot ETFs to follow soon after.
2024 is setting up to be an incredibly explosive year for Bitcoin and the rest of the crypto space.
Bitcoin has become a safe-haven asset in times of uncertainty.
-Tommy Sullivan