On 26 June 2017, CBOE Global Markets sent an application for a Bitcoin ETF (exchange traded fund) to SEC. It seems that bitcoin and some other cryptocurrencies are growing again after a long bear market and stagnation; and it might be because of the Bitcoin ETF approval rumors. We are probably going to see a new bull run in the crypto market in the next period… or not, who knows?
Let’s take a close look at the big financial players and what they do in this period.
Since the bear trend started, in January 2017, we could notice a typical market behavior. This behavior seems to have worked well for investors who used it; the ones who sold in this period have suffered great losses.
What exactly am I talking about?
It seems that the big investors and financial institutions, have a well defined strategy when they want invest in new markets. They might be using different methods in order to take down prices. Meanwhile they are ready to buy cheap cryptocurrencies from all the scared investors who panic and decide to sell their coins. I think exactly the same thing happened in the ’90s with the shares of Internet companies. And the same thing happened after the last big crisis in 2008.
After the crisis, banks bought at ridiculously low prices an incredible number of real estate that until today have appreciated considerably.
Returning to our business, I saw how huge investors, such as Goldman Sachs, J.P. Morgan, George Soros, and others, said that bitcoin was a fraud, that we are in a bubble, or that crypto market will get to zero. All of these things and FUD scared small investors and markets crashed.
Meanwhile, when prices went down, smart guys have begun to buy cryptocurrencies. Here are some pioneers of crypto investing who are buying these days: Wellington Capital, (they have over $ 1 trillion in assets); Andreessen Horowitz (one of the first investors in Airbnb, Skype, Facebook and Coinbase); The Rothschild family; Goldman Sachs (their new CEO, David Solomon is a crypto fan); BlackRock (the largest investment company in the world in terms of asset value); Marc Lasry (billionaire and Avenue Capital Group manager), and many others.
They will be followed by many other institutions, and when that happens, the crypto prices will explode. The bitcoin price way past the price registered in December 2017, when it took only three weeks to go from $7.000 to $ 20.000. What is it about?
We have to see what happens in regards to the approval of the Bitcoin ETF.
In the past, other applications to the SEC for similar Bitcoin ETFs, have all been rejected by the SEC. Their focus is to protect the investors, and we can not blame them.
But when the Bitcoin ETF gets approved, because it’s a matter of time, it means that SEC basically guarantees that it is safe and is likely to be bought by a greater range of investors, also financial institutions, varying from retirement funds to hedge funds, etc. Now, they could not risk approving such a product before all the details of investor safety were put on the table and discussed.
Why is it different now? There are two major reasons.
- First of all, they said they would provide insurance for the assets. That’s what the SEC doesn’t have to worry about… they know that if there is a hack, or other scenarios, investors are insured.
- Secondly, CBOE is an institution with an excellent reputation, which has very good relations with the SEC.
There might be a longer process until the Bitcoin ETF will be approved. But that is not an issue and even in anticipation of approval, cryptocurrencies will grow, getting to new highs. Even if the SEC will refuse once again the approval of the ETF, because it’s a plausible scenario, that doesn’t mean it will be the end of cryptocurrencies. Refusal means probably more regulations; and it will probably be a postpone in the appearance of a Bitcoin ETF.
Cryptocurrencies are here to stay and they represent the future.
You must be armed with patience. If you have the courage to invest early, you will have a great advantage when ETFs are approved. And you will be rewarded beyond expectations.
What do you think about the Bitcoin ETF application? Leave your thoughts in the comments below.