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Written by: George Prior
Bitcoin’s price is likely to skyrocket should, as he now believes is likely, the US financial regulator approves spot Bitcoin Exchange-Traded Funds (ETFs), says the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The bullish prediction from Nigel Green of deVere Group comes amid unconfirmed media reports that the US Securities and Exchange Commission (SEC) could imminently add to the federal register a swathe of applications from various major asset managers.
Spot ETFs invest directly in underlying assets, typically stocks or bonds, at the current market price (spot price). They aim to replicate the performance of a specific index or asset class by holding a portfolio of the actual securities that make up the index.
He says: “Should the SEC approve these filings, I expect the Bitcoin price will skyrocket for four main reasons.
“First, a Bitcoin ETF allows investors to gain exposure to Bitcoin without directly owning or trading the cryptocurrency. Such increased accessibility for both can lead to a larger pool of potential investors entering the market, driving up demand for Bitcoin.
“Second, the introduction of a Bitcoin ETF will undoubtedly attract institutional investors who have strict regulatory requirements and risk management policies. They’ll bring with them capital, expertise and clout.
“Third, ETFs are traded on established stock exchanges, providing liquidity and ease of trading. This liquidity will attract more traders and increase market efficiency, reducing price volatility. As such, increased liquidity and market efficiency can positively impact the price of Bitcoin and other cryptocurrencies.
“And fourth, a Bitcoin ETF will generate significant mainstream attention and media coverage which will drive up demand and prices in the crypto market.”
He concludes: “Although not confirmed, of course, I do believe approval at some stage – and maybe sooner rather than later – is almost inevitable.”