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Institutional Buyers, Bitcoin ETF Seen As the Catalysts to Turn Crypto Bears Into Crypto Bulls

Cryptocurrency NewsJun 25, 2018 03:41PM ET
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Institutional Buyers, Bitcoin ETF Seen As the Catalysts to Turn Crypto Bears Into Crypto Bulls

After Bitcoin’s price tanked over the weekend, dragging down the prices of other cryptos with it, there’s renewed talk about what could turn crypto bears into crypto bulls.

Much of the crypto discussion piggybacks on previous talk about the catalysts that could move cryptos’ prices higher, especially Bitcoin’s.

Over the weekend, Bitcoin’s price fell below $6,000 to around $5,900. While it quickly rebounded, trading higher about 24 hours after plunge, the crypto’s fall caused observers to start speculating over how the space is in need of something measurable to move the cryptos in it higher and become more stable.

Let’s discuss some of thoughts being bandied about.

The elusive ETF

For years, crypto observers have talked about a Bitcoin exchange-traded fund being key to propelling the crypto’s price higher. Many were enamored by the Winklevoss twins’ efforts to bring one online, but they were quickly disappointed by the U.S. Securities and Exchange Commission’s “no way” response to their idea.

Still, many won’t give up hope. This includes Ari Paul who co-founded BlockTower, a cryptocurrency hedge fund.

If and when there is a Bitcoin ETF in the crypto world, Paul believes it could propel Bitcoin’s price to $35,000.

Michael Strutton, the CEO at IronWood, seems to agree. He posted on Medium Sunday, his thoughts about what could move Bitcoin’s price higher. He wrote:

Let me describe how “easy” it is. Once the Securities and Exchange Commission allows Bitcoin ETFs, anyone with a 401K, IRA, or an investment account, like with the following top five broker-dealers, could invest in Bitcoin with a simple click — no wire transfer or credit card fees, no explaining Coinbase, other crypto exchanges, and security hurdles.

The top broker-dealers he listed are: Fidelity, Charles Schwab (NYSE:SCHW), Edward Jones, Ameriprise Financial (NYSE:AMP) and TD Ameritrade.

Come on in, Institutions

Another catalyst that could drive Bitcoin’s price higher is the entry of more institutions who invest in the space. With the launch of Bitcoin futures contracts by the CBOE and CME Group (NASDAQ:CME), institutions are increasingly warming to the space.

We reported to you earlier this month that the crypto market is no longer relegated to enthusiasts alone. Furthermore, with the massive profit potential on display, institutional investors have been open to entering crypto markets.

Paul agrees, saying that the next BTC rally will likely be the result of more institutional investors getting in on the action, and he sees the pickup happening before the end of this year.

Furthermore, Paul believes that once services like Coinbase Custody are up and running, institutional investors could be ready to enter.

Snagging the institutions

One of the biggest hurdles in attracting institutions relates to getting them comfortable with cryptos being a part of a legitimate asset class.

A move by the Intercontinental Exchange (ICE), which is the parent company of the New York Stock Exchange, could help. We reported how it is launching a trading platform that would allow investors to purchase Bitcoin.

The structure would entail swap contracts. These contracts would be settled with actual, “physical” Bitcoin placed in the customer’s account. That means that Bitcoin would be available at settlement, which could be as soon as the next day.

In addition, this platform could address the issues over custodianship, which also concern institutional players.

Paul noted this issue as being the last barrier preventing these players from investing in cryptos.

According to Paul:

“Institutional money started trickling into cryptocurrency in mid-2017, but it’s been slower than many expected. That doesn’t mean it’s not coming. There are a lot of pieces that need to come together, one big piece being third party custody. Custody isn’t binary. It’s not like Coinbase custody will launch and suddenly every pension will throw $100 million into BTC. It takes time for custody solutions to gain trustworthiness. But I think we’ll have solid third party custody by September of this year.”


This article appeared first on Cryptovest
Institutional Buyers, Bitcoin ETF Seen As the Catalysts to Turn Crypto Bears Into Crypto Bulls
 

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