Bitcoin Surges Beyond $36K: ETF Impact Yet to Unfold

Matt Hougan, the Chief Investment Officer at Bitwise Asset Management, envisions a bright future for Bitcoin's price. Recently, Bitcoin (BTC) experienced a surge, briefly breaching the $36,000 mark before settling slightly lower during Asian trading hours on Thursday. Over the past month, the leading digital asset in the world has demonstrated an impressive 30% increase, and over the course of the last year, it has witnessed an astounding 93% surge. This positive trend is not exclusive to Bitcoin alone; other significant digital assets, including ether (ETH), have also seen a noteworthy uptick, with ETH experiencing a 20% rise in the last month.

While some attribute the recent gains in Bitcoin to the anticipation of the widely expected approval of a bitcoin exchange-traded fund (ETF), Matt Hougan believes that an ETF has not yet been taken into account in the current price. In a recent interview, he stressed, 

"It’s not at all factored in because the people who are likely to purchase this ETF are unaware of its imminent arrival; the majority of advisors, who constitute the natural audience for this ETF, do not anticipate its approval until 2025 or later.”

Hougan highlighted that ETFs have the potential to revolutionize cryptocurrency investments by providing access to a wider range of investors, particularly financial advisors who manage a significant portion of the wealth in the U.S. He emphasized that while currently only 20% of self-directed retail investors have ventured into crypto, a substantial 80% of the wealth in America is overseen by financial advisors and institutions, who would require an ETF to explore opportunities in cryptocurrencies.

He drew a parallel between this potential shift and the introduction of gold ETFs in the early 2000s, stating,

"There’s an entirely new audience for bitcoin.”

 Hougan further referenced the approval of a spot gold ETF in 2004, which led to eight or nine consecutive years of gold price increases, marking the longest uptrend in its modern history since the dollar’s inception.

Hougan also underscored the significant psychological impact of BlackRock’s filing for a spot bitcoin ETF in June. He noted that this move effectively dispelled any lingering negative sentiment stemming from the FTX collapse, which he referred to as the “ghosts of Sam Bankman-Fried.” He pointed out, 

“When BlackRock filed for a bitcoin ETF, and CEO Larry Fink spoke on Fox Business News about bitcoin surpassing other currencies, concerns dissipated.”

As the cryptocurrency landscape continues to evolve, the potential approval of a bitcoin ETF could herald a new era for digital asset investments. It holds the promise of attracting a broader spectrum of investors and potentially shaping the trajectory of Bitcoin's price in the months and years ahead.

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