Trending
If you’re an advisor that’s fielding more bitcoin and cryptocurrency questions in recent days, it’s easy to understand why. Bitcoin, the largest asset in the crypto space, traded around $72,000 leading up to Election Day. As of this writing late Wednesday, the price is north of $90,000.
That puts makes $100,000 a credible near-term possibility and it’s one some market observers, including Nigel Green of deVere Group, are highlighting. Regardless of one’s political views, it’s clear bitcoin bulls liked the election results and that’s one reason a six-figure price tag could be on the horizon.
“Clarity in policy paves the way for confidence in the market,” adds Green, who believes bitcoin can ascend to $100,000 by the end of January. “With clear, supportive regulations, we expect institutional capital to pour into crypto like never before. Bitcoin, being the most established digital asset, stands to gain the most from this influx.”
Advisors are playing an important role in bitcoin’s recent ascent and are doing so by way of the spot exchange traded funds that debuted earlier this year. Data confirm as much.
Bitcoin ETF Flows on Scorching Pace
Signaling that the ETF wrapper has broadened bitcoin adoption, those vehicles hauled in $5 billion in October and $2.5 billion this month as of Tuesday.
That also says market participants, including advisors, were making election-related bets with bitcoin and used ETFs to express those views. October represented the best month of inflows to spot bitcoin ETFs since March, though it’s worth remembering these funds have only been around since January. Nor should it be ignored that some of the assets under management appreciation experienced by these ETFs is attributable to bitcoin’s surging price.
“While $28.8 billion has flowed into the category so far in 2024, much of the category’s asset growth has come from the soaring price of bitcoin this year, which has risen by 105% year to date,” notes Morningstar analyst Gabe Alpert.
It’s also worth evaluating why bitcoin has ascended so rapidly in such a short timeframe. Like him or not, President-elect Trump is a legitimate catalyst here. Call it pandering or whatever, but he catered to the crypto community on the campaign trail and his administration could unveil regulations that are more supportive of crypto innovation.
“That cryptocurrency rally has been particularly strong since the election earlier this month. On Nov. 4, the day before the election, bitcoin’s price sat at $67,813, but since the election it’s risen 28% to $86,603,” added Alpert. “The Trump campaign had been a major booster of cryptocurrency, and Trump also campaigned extensively with Elon Musk, who has also been extremely bullish on cryptocurrencies.”
What’s Next for Bitcoin ETFs?
Answering that question is easier said than done and it’d be foolhardy of me to promise more upside as I don’t have a bitcoin crystal ball.
But when it comes to bitcoin and cryptocurrency at large, many investors have accurate fear of missing out (FOMO). FOMO is real and pronounced in the world of crypto and while it’s not investment advice, it is an emotion that could drive latecomers to bitcoin, thus stoking higher prices.
Speaking of high prices, with bitcoin residing above $90,000, that’s a price at which at many market participants cannot afford half a coin, let alone a full one. With the largest bitcoin residing around $50, it’s not a stretch to say many retail investors will opt for ETFs over direct stakes in the digital currency.