Bitcoin is going to $14,000, bulls say. That’s the tamest call. Tim Draper thinks it goes to $200,000 by 2022. Others in the market, like Forbes columnist and London’s ThinkMarkets strategist Naeem Aslam, think $50,000 by December is doable.
They mostly say it is because of news of exchange-traded funds getting closer to getting greenlit by the Securities & Exchange Commission. They also cite market-friendly regulations that make real-money investors think the top cryptos can be traded with investor protections, no different than gold futures and forex. Those regulations give investment advisors with fiduciary responsibility to a client an impetus to put money to work in crypto.
Once Bitcoin is regulated as a security, when institutional investors follow in the footsteps of high-net-worth individuals and hedge funds already in crypto, then this market goes to the moon.
To put it in cryptocurrency cult vernacular: “when moon?” Soon as Harvard and the Ford foundation decide that a quarter-percent allocation to Bitcoin and other top 10 coins is plausible, that’s when.
“You already have professors looking at how to value cryptocurrencies like a traditional security,” says Bitcoin skeptic and Acadian Asset Management strategist Philip Owrutsky. We were at the Palms in Boston on a fall-like day in June, in sweaters, complaining about the weather. An impassioned debate on Bitcoin kept us warm.
“I’m not convinced Bitcoin eventually becomes the lead, global cryptocurrency,” he tells me. “And I’m not convinced that institutional money is going into it. But they are inquiring about it, that is for sure.”
On Tuesday, the Securities & Exchange Commission postponed its decision on Direxion’s new Bitcoin ETF. The Massachusetts-based fund company, known for its double-leveraged ETFs, will have to wait until September for a decision.
Something is in the water, though.
San Francisco-based Bitwise Asset Management wants to surf Direxion’s wake. They filed with the SEC on Tuesday, the WSJ reported.
Sustany Capital, a Newport Beach crypto and blockchain investment firm, recently conducted a survey of 1,000 U.S. adults regarding attitudes toward cryptocurrencies. The report will be published in a few weeks. But one of the takeaways is that 88% of Millennials said they will buy crypto because they think it is a good investment.
The Millennial generation is the biggest generation in the workforce, according to Pew Research. They are also the largest generation since the Baby Boomers.
“I’d say that there is little to no appeteite to put client money into digital assets right now,” says Michael Chang, managing director of the Strategic Advisory Group at Wachsman PR, calling in from a Switzerland Crypto Value Conference. Chang is like many others in finance—he left Jeffries to do a deep dive into the unknowns of crypto land.
“When you’re a bank like Jeffries, you have responsibilities to your clients. If you want crypto, you have to go to the specialist firms like a Pantera or a Soros Management, which is now investing in it through a separate fund. A lot of these guys have money in the big 10 coins now,” he says.
Europe is all over this. Switzerland in particular.
The adoption rate there is higher than it is in Europe, with roughly one in 1,000 people owning Bitcoin.
“Bitcoin used to be immeasurable in market size, but is now about 1% of the gold market—a traditional hedge against currency—and 1% of the multitrillion-dollar gold market is not a small thing,” says Niklas Nikolajsen, co-CEO and chairman of Bitcoin Suisse, a regulated cryptocurrency broker in Zug, Switzerland.
The combined turnover for Bitcoin Suisse in its first year of operation was less than $10 million. Now they claim to do that in a single day. Their average turnover in the fourth quarter of 2017, when Bitcoin hit an all-time high of $20,000, was $750 million a month, Nikolajsen told me.
Around half of this is coming from professional investment managers,…