Following a challenging year in 2022, positive signals are emerging for the future of Bitcoin (BTC). In July, Bitcoin’s value surged past $30,000, a noteworthy development attributed to asset manager BlackRock’s move to file for a Bitcoin exchange-traded fund (ETF) through the United States Securities and Exchange Commission (SEC).
BlackRock’s application for a Bitcoin ETF sparked a new wave of optimism around the crypto market, which led other major firms such as ARK Investment, Valkyrie and Fidelity to file their own applications for a Bitcoin ETF.
What does this institutional interest mean for Bitcoin and the crypto industry in general?
In this interview, Ed Moya, a senior market analyst at OANDA with more than 20 years of trading experience, delves into the significance of BlackRock’s foray into the crypto space, highlighting how this influential move marks a turning point in dispelling the notion of cryptocurrencies as a fleeting trend.
Cointelegraph: In the U.S. and the global crypto market, how significant is the recent institutional interest from financial giants like BlackRock?
Ed Moya: Much of the institutional world is still licking its wounds from getting into cryptocurrencies during the historic bull run of 2021–2022. The long crypto winter seems over, but it came at a price. Crypto became a “don’t touch” investment, but that is changing with several prominent institutional players signaling interest.
However, BlackRock’s interest in crypto was a game changer for many. It is a significant turning point that crypto is not going away anytime soon.
CT: Has there been meaningful adoption of cryptocurrencies globally?
EM: Crypto adoption is happening slowly as the excitement around digital assets grows. There seems to be steady global interest, just not so much in the U.S. or Europe, as their regulatory environments are taking shape slowly.
Cryptocurrencies have not seen any major developments in crypto adoption yet, which is expected to change over the next decade. Blockchain projects are progressing slowly, but developers seem committed to the space.
CT: How have crypto stocks benefited from the momentum of Bitcoin ETFs and growing mainstream acceptance by financial advisers?
EM: Much of the general public is still unsure how to best get exposed to crypto. Bitcoin ETFs have not ignited widespread interest, as many remained focused on companies like MicroStrategy and Coinbase.
CT: Do you expect the trend of crypto stocks benefiting from the momentum of Bitcoin ETFs to continue?
EM: A spot Bitcoin ETF is critical to further mainstream acceptance of cryptocurrencies. Eventually, the public may become more confident in investing directly with cryptocurrencies, which could lead to fewer flows for crypto stocks.
CT: If recessions become a dominant theme next year, will Bitcoin perform as a global reserve asset?
EM: Bitcoin must overcome several challenges and uncertainties to become a global reserve asset. Large parts of the cryptocurrency world rely on borrowing, so it will be critical that tightening credit conditions don’t weaken companies that could drive the next wave of use cases for crypto.
What kind of recession hits the global economy will ultimately determine whether we see a de-risking moment on Wall Street. Still, uncertainty remains about whether Bitcoin will act as a safe haven.
CT: As some analysts have suggested, how likely is it that Bitcoin will reach a price of $120,000 by the end of 2024?
EM: Bitcoin forecasts should always be written in pencil as it seems excessive volatility and drivers can come out of nowhere. Given the wave of fresh institutional interest, Bitcoin’s long-term bullish case appears to have been bolstered. However, the thing with big money is that it won’t remain patient if it continues to underperform.
CT: Given current market conditions and trends, what trading range do you expect Bitcoin to trade in over the next few years?
EM: Bitcoin volatility should pick up throughout the rest of 2023 as some of the big questions over ETFs and some legal battles will finally have some answers. Throughout the first wave of institutional interest, the $20,000 to $40,000 range should provide a key trading range, so it shouldn’t be surprising if the price tries to gravitate toward those levels again.
The long-term outlook will be influenced by central bank digital currencies, whether smart contracts take off, and if public interest remains healthy. If Wall Street remains committed to the crypto space and more investors allocate a single-digit percentage of their portfolios to crypto, Bitcoin’s case for a rally toward $100,000 will be strengthened.
CT: Are there any specific factors or events that could significantly impact Bitcoin’s trading range in the foreseeable future?
EM: The cryptoverse wants clarity on what it will take to have a U.S. Bitcoin ETF approved, which cryptocurrencies will be deemed securities, and how attractive central bank digital currencies (CBDC) will become. Mainstream acceptance is the key for Bitcoin to appreciate and will require real-life examples of how crypto can make companies more efficient.
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