A bit too much enthusiasm about the Bitcoin ETF
The crypto world is increasingly awaiting messianic approval by the SEC of the Bitcoin ETF of Blackrock and other fund managers. A return to the pre-2021 golden age is expected, with trillions of dollars magically flowing towards the green prairies (obviously making those who moved first rich…).
The rumors consider the wonderful event to be certain, because the belief has now spread that Gary Gensler’s SEC will only be able to make a positive decision, i.e. one of approval. The fact that this is in contrast to the guidelines held so far and also what GG supported in the hearings before the US Congressional commissions does not concern anyone. The event is expected in 1Q24, or even, according to the most optimistic, shortly after the Epiphany.
Two observations:
- There has been so much talk about the Event that it would not be surprising if the current price already included the expected approval, so at least in the immediate future there would be a drop by virtue of the old stock market adage buy the rumors, sell the news
- But the most delicate point is something else. We already mentioned it a few weeks ago in relation to the possible deadly embrace of traditional finance, of which these ETFs are certainly an expression, to the world of cryptocurrencies.
The point is that cryptocurrencies were born, and can develop, only if they become a widespread means of payment. If a phenomenon of progressive adoption by the general public occurs. In other words, if they can be used, and therefore accepted, in current life to buy current goods, bread, shoes, gas, etc. If they can also be seen as a hoarding tool that does not lose value over time, and even acquires it. And in this the essentially deflationary nature of cryptocurrencies, due to the burning and lost coin mechanisms, can be a favorable element.
If, however, they were monopolized by a few large financial players, those who claim that they are hot air without being based on anything concrete would be right. It would really be a variant of the Ponzi scheme destined to collapse like the tulip bulbs of the 17th century. But at least those were something concrete and at least they made Amsterdam the largest tulip market in the world. Here the risk is that not much remains, other than piles of dead and injured (virtual, for goodness’ sake) here and there on the planet and a few mining rig sheds (as the crypto “production” centers are called) abandoned in some mostly cold and deserted.
The related Generative Artificial Intelligence question is posted in the dedicated gallery: Bard, what is your opinion on Bitcoin ETFs?