As Bitcoin touches $36K, Bitwise CIO sees more upside upon approval of Bitcoin ETFs

Despite the impressive performance of bitcoin this year, Matt Hougan, Chief Investment Officer of Bitwise Asset Management, believes that the widely expected approval of a bitcoin exchange-traded fund (ETF) is not yet priced in.

Recent data from CoinDesk Indices revealed that the price of bitcoin (BTC) briefly reached $36,000 before paring some of the gains during Asian trading hours on November 9.

Bitcoin has experienced a 30 percent increase in the last month and a remarkable 93 percent increase over the past year. Other major digital assets, including ether (ETH), have also seen positive gains, with ETH up 20 percent in the last month.

Despite the impressive performance of bitcoin this year, Matt Hougan, Chief Investment Officer of Bitwise Asset Management, believes that the widely expected approval of a bitcoin exchange-traded fund (ETF) is not yet priced in.

He explains that potential ETF buyers are not aware that it is coming or expect it to be approved until 2025 or later. Therefore, if these buyers do not anticipate its approval in the next two months, it cannot be considered priced in.

Hougan emphasises the significant role that ETFs will play in expanding cryptocurrency investments to a broader range of investors, particularly financial advisors who manage a substantial portion of the U.S.' wealth. Currently, only 20 percent of self-directed retail investors have bought crypto, while 80 percent of America's wealth is controlled by financial advisors and institutions who require an ETF to access crypto.

He compares the potential impact of a bitcoin ETF to the launch of gold ETFs in the early 2000s, which led to a prolonged period of gold price increases. Hougan suggests that BlackRock's filing for a spot bitcoin ETF in June had a significant psychological impact on the market, dispelling the negative sentiment caused by the FTX collapse.

Also read: Bankman-Fried's trial exposed crypto fraud but Congress has not been eager to regulate the industry

Moreover, coincidentally, an anonymous source recently revealed that the US Securities and Exchange Commission (SEC) is engaged in with Grayscale Investments. The talks are regarding their application to convert Grayscale Bitcoin Trust (GBTC) into a spot bitcoin ETF.

This development holds significant implications for the cryptocurrency industry. The approval of an ETF application by the SEC is highly anticipated as it has the potential to make digital assets more accessible to everyday investors. Grayscale has been in contact with both the Division of Trading and Markets and the Division of Corporation Finance at the SEC since their court battle. The talks are ongoing and remain confidential at this time.