Riding the Bitcoin Optimism Wave
A spot Bitcoin BTC/USD exchange-traded fund (ETF) hangs in the balance, with many anticipating a selloff should approval be granted. However, Cathie Wood of Ark Invest is boldly bucking this trend.
The SEC Rethinks Its Approach
What To Know: Over the last three months, Bitcoin has surged by approximately 70%, largely fueled by the growing hope of spot ETF approval. The Securities and Exchange Commission (SEC) is now expected to greenlight the ETF this week, marking a notable shift in its stance.
During an appearance on CNBC’s “Fast Money Halftime Report,” Wood alluded to the SEC’s renewed line of questioning and its changed demeanor, signaling an impending nod to the ETF. Anticipating a sell-the-news scenario post-approval, Wood observed, “I think so many people are expecting now a sell on the news that we might not have a sell on the news because once you hear that enough, that positioning has already taken place.”
Bright Times Ahead for Bitcoin
Where Bitcoin Is Headed: Foreseeing a continued upward trajectory for Bitcoin following approval, Wood predicted a substantial influx of retail and institutional capital. She underscored the ETF approval as a ‘green light’ for institutions, pointing out that even a modest institutional allocation to Bitcoin could propel the scarce asset to new heights.
Emphasizing Bitcoin’s role as digital gold, Wood juxtaposed Bitcoin’s current $900 billion market cap with gold’s $12 trillion valuation, hinting at an asset substitution wave post-spot ETF approval.
Demand and Supply Dynamics
Wood elucidated the unique supply-demand dynamics of Bitcoin, noting a soaring demand for the cryptocurrency against its capped supply. Over 19 million Bitcoins are currently in circulation, with approximately 15 million held by long-term investors, underlining the finite nature of the digital asset. With only 21 million Bitcoins ever to be mined, Wood projected a future market cap akin to that of gold, hinting at a potential value of over $600,000 per coin.
Price Action: At the time of writing, Bitcoin was up roughly 6% over a 24-hour period, trading at $46,793.
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