In the ever-evolving landscape of the cryptocurrency industry, a pivotal narrative has emerged— the impending approval of a spot Bitcoin exchange-traded fund (ETF). Founder of Pantera Capital, Dan Morehead, recently delved into the significance of this development in a comprehensive report.
On November 21, Morehead, the managing partner of Pantera Capital, shared insights into the likely approval of a spot Bitcoin ETF in the near future and its potential ramifications.
Morehead emphasized the bullish nature of a spot Bitcoin ETF, citing the historical pattern of “buy the rumor, sell the news” that played out during significant regulatory announcements. Drawing parallels, he recalled the bull market peak at $20,000 when CME Bitcoin futures went live in December 2017, followed by a 65% crash by early February.
Similarly, the Coinbase IPO launch in April 2021 saw Bitcoin’s price at around $65,000, only to plummet 54% by July of the same year.
Contrary to past events, Morehead asserted that the approval of a BlackRock ETF would fundamentally alter access to Bitcoin, resulting in a substantial positive impact. Unlike previous instances where speculators merely reacted to the news without affecting real-world access to Bitcoin, a spot Bitcoin ETF has the potential to be a game-changer.
Expressing confidence, Morehead predicted the approval of several spot Bitcoin ETFs within the coming months. He highlighted the fundamental difference between futures crypto ETPs backed by contracts on the Chicago Mercantile Exchange and spot products backed by the asset itself. Issuers of spot products would need to acquire Bitcoin to offer contracts to their clients, making it a more direct and impactful investment.
Drawing parallels with the launch of the first spot gold ETF in November 2004, Morehead sees the potential for Bitcoin to become a recognized asset class. He noted that once an ETF exists, lacking exposure could effectively position investors on the short side.
Analysts have drawn comparisons to the gold market, where the launch of the first spot gold ETF in 2004 legitimized gold as an investment, leading to a surge of over 300% in prices by the end of 2011.
The approval of a spot Bitcoin ETF could mark a crucial step in solidifying Bitcoin as a mainstream investment and reshaping the cryptocurrency landscape.