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Thursday, October 21, 2021
Bitcoin to $100K+? Don't rule it out
A rough summer swoon followed by a whipsaw start to the fall is now starting to give way to the cryptocurrency’s moment in the sun. With the introduction of a new exchange-traded fund this week and more lining up at the gate, bitcoin's rocket ship to a new record high near $67,000 on Wednesday is suddenly putting levels at (or above) $100,000 into play.
Big investors are moving to cash in on the bitcoin boom with dizzying speed.
Over the last couple of days, Grayscale Investments and Valkyrie both announced plans to issue ETFs of their own, with the latter coming to market as early as this week, according to a company spokesperson. Meanwhile, bond giant Pimco revealed plans to incrementally boost its investment in crypto, CIO Daniel Ivascyn told CNBC in an interview.
In a twist of irony, the ProShares Bitcoin Strategy ETF (BITO) amassed more assets under management within two days than the gold-based SPDR ETF (GLD) did — a point crypto enthusiasts made with undisguised glee.
Bitcoin hasn’t quite yet achieved safe-haven status (it’s still way too volatile, a point we’ve made before in the Morning Brief) but there’s no denying that the market is sending a powerful signal about the future of digital coins.
And it can be directly traced back to two separate yet related events: China's heavy-handed crypto crackdown, which put the U.S. on the fast-track to becoming a global center for Bitcoin mining, and Securities and Exchanges Commission Chair Gary Gensler declaring his support in principle for crypto-based ETFs, even as his agency gets criticized for its regulation efforts.
However inadvertently, the self-described lover of romantic comedies may have helped investors big and small embrace their love of digital coins.
“There are three important things about this [bitcoin] ETF narrative-wise,” CoinDesk Managing Director Emily Parker told Yahoo Finance Live.
“It’s a sign of legitimacy. … It is opening up bitcoin exposure to a new class of investors. … It’s a sign of some degree of regulatory friendliness,” Parker added.
According to MoffettNathanson senior equity analyst Lisa Ellis, the market was expecting a “far steeper and more protracted decline in crypto assets" after the spring sell-off. "The fact we're actually back here above 60,000... is a really positive outlook," she told Yahoo Finance Live.
To be sure, the sector is still not for the faint of heart or thin in pockets, with UBS pointing out that growth opportunities in digital coins are suited “only for highly risk tolerant and speculative investors.”
Still, it’s hard to deny that the nascent ETF boom is a milestone in bitcoin’s grudging yet growing acceptance. Is $100,000 — or even higher — the next stop?
Don’t rule it out.
Yahoo Finance Highlights