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⚡Banking Giant Predicts $200,000 for BTC👣

Croxroad

09 Jan 2024 — 3 min read

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⛽ Bitcoin Boom Ahead

Standard Chartered, a major multinational bank, has made a bullish prediction for Bitcoin, forecasting a potential surge to nearly $200,000 by late 2025. This optimistic outlook is contingent on the approval and success of Bitcoin exchange-traded funds (ETFs) in the United States. The bank's projection hinges on the assumption that spot Bitcoin ETFs could attract substantial inflows, estimated to be between $50-100 billion by the close of 2024. Standard Chartered executives, including Geoff Kendrick and Suki Cooper, view the approval of spot Bitcoin ETFs as a significant "watershed moment" that could normalise Bitcoin participation and drive substantial price gains.

In addition to the ETF narrative, blockchain strategist Jamie Coutts emphasises the strengthened fundamentals of Bitcoin's network. According to Coutts, the "Bitcoin Network Activity" graph indicates that Bitcoin's fundamentals are currently at an all-time high. Despite this, Bitcoin remains undervalued, standing at 40% below its previous peak. Coutts attributes the strength in fundamentals to novel use cases like inscriptions, highlighting the network's robustness during the current market cycle, which he deems undervalued compared to its potential.

However, not all industry experts share an unwavering confidence in Bitcoin's rally. Bloomberg Intelligence's senior macroeconomic strategist, Mike McGlone, adopts a more cautious stance. McGlone suggests that risk assets, including Bitcoin, might face a decline after potential ETF approval. He urges vigilance, cautioning against becoming overly optimistic and emphasising the need to be mindful of the market dynamics, especially in the wake of significant events like ETF approvals.

🏓 Cost Battle in Bitcoin ETF Arena

Several investment managers, including BlackRock, VanEck, Ark Investments/21Shares, and Bitwise, have revealed the fees they plan to charge for their proposed spot Bitcoin exchange-traded funds (ETFs). In filings with the Securities and Exchange Commission (SEC), these firms expressed their intent to undercut the average market rate for U.S. ETFs. The fee competition is intensifying as they gear up for a crucial SEC approval deadline later in the week. Bitwise leads the charge with the lowest fee at 0.24 percent, followed closely by VanEck at 0.25 percent. Notably, Ark and 21Shares adjusted their planned fee from 0.80 percent to 0.25 percent, while BlackRock aims to charge 0.30 percent.

These fee disclosures mark a significant step as they are typically finalized just before an ETF launch. The SEC's potential approval of spot Bitcoin ETFs this week is highly anticipated, representing a watershed moment for an industry that has been striving for a decade to bring this product to market. Todd Rosenbluth, head of research at VettaFi, describes the situation as unprecedented, highlighting the dramatic and exciting race among these firms. The SEC has historically rejected spot Bitcoin ETFs, citing investor protection concerns, but optimism surged after a federal appeals court ruled in favor of Grayscale last year. Grayscale, known for its Bitcoin Trust (GBTC), plans to charge 1.5 percent for its proposed ETF, the highest fee disclosed so far.

🪙 Is Bitcoin Regulated?

The regulation of Bitcoin is complex and varies widely across different jurisdictions. From country to country and even within states, the level of regulation remains a murky subject. In the United States, the Internal Revenue Service (IRS) typically classifies Bitcoin and other cryptocurrencies as property, subjecting them to tax treatment similar to assets. On the other hand, the Commodity Futures Trading Commission (CFTC) views Bitcoin as a commodity, regulating it within the commodities market framework. Specifically, when it comes to Bitcoin Futures ETFs, they fall under the regulatory purview of the CFTC, further emphasising the multifaceted nature of Bitcoin's regulatory landscape.