By The price of Bitcoin (BTC) is “about to explode” said Ran Neuner, crypto analyst and the host of the Consumer News and Business Channel (CNBC’s) show Cryptotrader, in a tweet from 7 October 2018. In his tweet, Neuner stated that he had just bought Bitcoin for his parents and that “it’s too obvious that it’s [the price of Bitcoin is] about to explode”.
High Anticipation for Bitcoin Exchange-Traded Fund Applications
This swell in optimism comes as a result of the highly anticipated decisions by the US Security and Exchange Commission’s (SEC) on several Bitcoin Exchange-Traded Fund (ETF) applications, that are soon to be made. According to Neuner, these long-awaited decisions regarding Bitcoin ETF’s and the looming deadline of two SEC decisions is a substantial development that will have a huge impact on the crypto market.
Neuner likens the presumed impact the ETF decisions will have on the crypto markets to that of the surge in price in December last year. In December 2017 the price of Bitcoin rose astronomically in a mere 5-week period from $6,691 on 11 November 2017 to $20,000 on 17 December 2017. This increase in Bitcoin prices was, according to Neuner, as a result of the “expectation and launch of a cash settlement BTC futures contract”.
The confirmation from the U.S. Commodity Futures Trading Commission (CFTC) on 1 December 2017 that the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME) were eligible to launch Bitcoin futures resulted in the historic high of Bitcoin prices. Notably, the first launch of Bitcoin futures occurred on 11 December 2017 by CBOE, with CME following suit on 17 December 2017, resulting in a Bitcoin price high of $20,000.
However, and according to Neuner, we can expect a similar, if not more dramatic, increase in Bitcoin prices as a result of the ETF decisions. Neuner believes the ETF decisions are “a way bigger deal” than the news of last year and a cash settlement Bitcoin futures contract. The ETF decisions will result in the actual purchase of Bitcoin, not merely a speculative increase.
Bitcoin ETF to Help Bitcoin Reach More Mainstream Investors
The launch of a Bitcoin EFT is thought to result in Bitcoin being able to reach more mainstream investors as these investors would no longer have to directly invest in the underlying asset, namely cryptocurrency. A Bitcoin ETF could, therefore, have the potential to broaden Bitcoin’s recognition on Wall Street if it were to become listed on a regulated US exchange.
Approval of a Bitcoin EFT, although obviously beneficial and presumably inevitable, has yet to occur. The SEC has already rejected two applications by the Winklevoss twins which were made in March 2017 and July 2018. SEC Commissioner Hester M. Peirce has stated that the disapproval order of the Winklevoss fund appeal would likely “inhibit” the institutionalization of the BTC market.
Despite this, the SEC has nominated the 5th of November 2018 as the deadline by when nine Bitcoin ETF applications from three different applicants will be reviewed. With these looming deadlines fast approaching, the actual effect of the Bitcoin EFT decisions is yet to be determined.
Do you believe there will be another spike in Bitcoin prices? Will December 2018 follow-on the trend of December 2017? Or will the SEC reject yet more Bitcoin EFT applications? Give us your thoughts in the comments below.
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