Bitcoin ETF Approved, Institutions Won’t Tell You They’re FOMO

From an investor perspective, altcoins appear to be undervalued and the Ethereum ecosystem is poised to reap huge gains.

Written by Duo Nine

Compiled by: Shenchao TechFlow

With the passage of Bitcoin ETFs and institutional involvement, the nature of cryptocurrency cycles is about to change. Big money now has unprecedented control over Bitcoin and its price

A total of 11 ETFs began trading last Thursday, with first-day trading volume reaching $4.6 billion – double the gold ETF record! It turns out that early Bitcoin adopters were right.

This is a pivotal moment for Bitcoin and we are entering a new chapter in the cryptocurrency. In the process, Bitcoin has solidified its position as the market leader and remains the undisputed king. However, it’s not all good news.

With trading volume approaching $10 billion in three days, the Bitcoin ETF was a huge success and everyone benefited. Grayscale was finally up for sale, and they did. In total, GBTC sold over $500 million in Bitcoin. Until then, Grayscale can only buy and hold.

Fortunately, other ETFs were net buyers, purchasing a total of $800 million in new Bitcoin. On average, that’s nearly $300 million per day! This is equivalent to taking 7,000 BTC from the market every day!

With only 900 new BTC being mined every day, this buying pressure may soon be reflected in the price of Bitcoin. Not to mention that in 90 days, the halving event will halve mining rewards to 450 BTC per day (expected on April 22, 2024).

If the numbers in these ETFs continue this way, there won’t be many Bitcoins left. Even as trading volumes decline, ETFs represent additional demand that did not exist in the past. Additionally, they’re pitting regular investors against whales and people like MicroStrategy’s Saylor.

What is the result of all this?

Bitcoin will grow like never before during this cycle and we will witness panic buying by institutions driving Bitcoin to unprecedented levels, i.e. Bitcoin will hit new highs.

Why is the price of Bitcoin hitting new highs?

1. Bitcoin is the first ETF with a fixed supply! This is historic, traditional finance has never seen this before

Looking ahead, the 4-year pump-and-sell cycle based on the BTC halving is about to change dramatically. First, Bitcoin will rise strongly. No one knows how high it will go, but anything between 10w-20w is realistic.

Second, once the price reaches the top, the crash will come. But it won’t be the plunge you think. After this cycle ends, Bitcoin’s volatility is likely to decline significantly, and its plunge may not be as deep as it has been in the past (-77% in 2022).

If you missed buying Bitcoin under 50,000, you may never get the chance to see such a price again. If Bitcoin can maintain a six-digit price in the next bear market, most retail investors will be successfully squeezed out of the market and will not buy Bitcoin because the price is too high.

Bitcoin could eventually surpass gold’s market capitalization by over $13 trillion. This means that 1 Bitcoin is worth about $500,000, which is almost beyond the reach of retail investors. But they can certainly afford a $50 share of a Bitcoin ETF.

By simply pushing the price high enough, institutional players can take control of the Bitcoin market and push you to buy their ETF shares because then it will be more attractive and accessible.

Therefore, most people will never own and keep actual BTC, even though Bitcoin is divisible by 100 million and you can buy fractions of it (called satoshis). Most Bitcoin will be in the hands of institutions.

2. Bitcoin will no longer be controlled by us, but by institutions

As Bitcoin matures as an asset class and its ETF AUM grows into tens or even hundreds of billions, its volatility will naturally decline. This means that declines in future bear markets will be less significant.

Furthermore, these institutional players have a well-established interest in preventing excessive price declines, which would otherwise undermine their commissions. This is also the real motivation to control the price of Bitcoin. How do they control it?

Bitcoin is now fully integrated into U.S. financial markets. This means that anyone with access to U.S. dollars can go short or long Bitcoin indefinitely until the desired price is reached. With spot ETFs, they now have all the tools they need.

We know that U.S. banks can borrow unlimited amounts of dollars from the Fed on demand, and they can use those dollars to manipulate any market. The housing bubble is a good example. Will Bitcoin be the next target?

If you’re here to make money, this probably won’t worry you too much, as the numbers will rise quickly no matter which way you look at them. However, in the long term, it does pose a threat to the original ethos of Bitcoin as an alternative to the current fiat-based financial system.

In this way, Bitcoin may be controlled by Wall Street. However, Bitcoin is more than just sound money or digital gold. It is a movement that can change the way money is perceived and, through its own success, change the fiat-based system that has just adopted it.

3. Bitcoin ETF approval shows altcoins are undervalued, especially Ethereum

The approval of a Bitcoin ETF is extremely positive for altcoins. Ethereum jumped immediately after the news broke. Perhaps this is also because Ethereum is the next cryptocurrency that may be considered for an ETF.

However, Ethereum’s journey may be different as the U.S. Securities and Exchange Commission (SEC) is still unsure whether ETH is a security. The vote to approve the Bitcoin ETF was 3 out of 5 in favor and 2 against, leaving the decision hanging on a single vote!

Considering that Ethereum’s fundamentals are so different from Bitcoin, it would be surprising to see ETH win a similar vote. The SEC has declared Bitcoin an asset, but that’s not necessarily the case for Ethereum or most altcoins.

Nonetheless, these developments suggest that altcoins appear to be undervalued from an investor’s perspective and that the Ethereum ecosystem is poised to reap significant gains.