From an investor’s perspective, altcoins appear to be undervalued and the Ethereum ecosystem is poised to reap huge gains.
With the passage of Bitcoin ETFs and institutional involvement, the nature of cryptocurrency cycles is about to change. Big money now has unprecedented control over Bitcoin and its price
A total of 11 ETFs began trading last Thursday, with first-day trading volume reaching $4.6 billion – double the gold ETF record! It turns out that early Bitcoin adopters were right.
This is a pivotal moment for Bitcoin and we are entering a new chapter in the cryptocurrency. In the process, Bitcoin solidified its position as the market leader and remains the undisputed king. However, it's not all good news.
With nearly $10 billion in volume in three days, the Bitcoin ETF was a huge success and everyone benefited greatly. Grayscale was finally able to sell, and they did. In total, GBTC sold more than $500 million in Bitcoin. Before this, Grayscale could only buy and hold.
Fortunately, other ETFs were net buyers, purchasing a total of $800 million in new Bitcoin. That’s nearly $300 million per day on average! That’s the equivalent of taking 7,000 BTC off the market every day!
With only 900 new BTC being mined per day, this buying pressure could soon be reflected in the price of Bitcoin. Not to mention that in 90 days, the halving event will cut the mining reward in half to 450 BTC per day (expected on April 22, 2024).
If the volume of these ETFs continues to trend like this, there won’t be a lot of Bitcoin left. Even if volume declines, ETFs represent additional demand that didn’t exist in the past. Plus, they put regular investors, whales, and people like MicroStrategy’s Saylor in competition.
What is the outcome of all this?
Bitcoin will grow like never before in this cycle and we will witness panic buying by institutions driving Bitcoin to unprecedented levels, i.e. Bitcoin will hit new highs.
Why is the price of Bitcoin reaching new highs?
1. Bitcoin is the first ETF with a fixed supply! This is historic, traditional finance has never seen this before
Looking ahead, the 4-year pump and dump cycle based on BTC halving is about to change dramatically. First, Bitcoin will rise strongly. No one knows how high it will go, but anything between 100,000-200,000 is realistic.
Second, once the price reaches the top, the crash will come. But it won't be the plunge you think. After this cycle ends, Bitcoin's volatility is likely to decline significantly, and its plunge may not be as deep as it has been in the past (-77% in 2022).
If you missed buying Bitcoin below 50,000, you may never have the chance to see such a price again. If Bitcoin can maintain a six-digit price in the next bear market, most retail investors will be successfully squeezed out of the market and will not buy Bitcoin because the price is too high.
Bitcoin could eventually surpass gold with a market cap of over $13 trillion. This would mean 1 Bitcoin would be worth about $500,000, which is barely affordable for retail investors. But they could certainly afford a $50 share of a Bitcoin ETF.
Simply by pushing the price high enough, institutional players could take control of the Bitcoin market and push you into buying their ETF shares because it would then be more attractive and more accessible.
Therefore, most people will never own and keep custody of actual BTC, even though Bitcoin is divisible by 100 million and you can buy a fraction of it (called a Satoshi). Most Bitcoin will be in institutional hands.
2. Bitcoin will no longer be controlled by us, but by institutions
As Bitcoin matures as an asset class and its ETF AUM grows into tens or even hundreds of billions, its volatility will naturally decline. This means that declines in future bear markets will be less significant.
Furthermore, these institutional players have every interest in preventing the price from falling too much, otherwise their commissions will suffer. This is also the real motivation to control the price of Bitcoin. How do they control it?
Bitcoin is now fully integrated into the U.S. financial markets. This means that anyone with access to U.S. dollars can go short or long Bitcoin indefinitely until the desired price is reached. With a spot ETF, they now have all the tools they need.
We know that US banks can borrow unlimited dollars from the Federal Reserve on demand, and they can use these dollars to manipulate any market. The housing bubble is a good example. Will Bitcoin be the next target?
If you’re here to make money, this may not worry you too much, as the numbers are going up fast no matter how you look at it. However, in the long run, it does pose a threat to the original ethos of Bitcoin as an alternative to the current fiat-based financial system.
In this way, Bitcoin may be controlled by Wall Street. However, Bitcoin is more than just sound money or digital gold. It is a movement that can change the way money is perceived and, through its own success, change the fiat-based systems that have just adopted it.
3. Bitcoin ETF approval shows that altcoins are undervalued, especially Ethereum
The approval of a Bitcoin ETF is extremely bullish for altcoins. Ethereum immediately rose after the news. Perhaps this is also because Ethereum is the next cryptocurrency that may be considered for an ETF.
However, Ethereum’s journey may be different as the U.S. Securities and Exchange Commission (SEC) is still unsure whether ETH is a security. The vote to approve a Bitcoin ETF was 3 in favor and 2 against out of 5, with the decision hanging by a single vote!
It would be surprising to see Ethereum win a similar vote, considering that Ethereum’s fundamentals are so different from Bitcoin. The SEC has declared Bitcoin an asset, but that may not be the case for Ethereum or most altcoins.
Nonetheless, these developments suggest that altcoins appear undervalued from an investor’s perspective and the Ethereum ecosystem is poised for massive gains.
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