Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Bitcoin could soar to US$180,000 if BlackRock ETF approved, analysts say
The price of bitcoin could jump to as high as US$180,000, with retail demand potentially surging if a bitcoin exchange-traded fund (ETF) from BlackRock is approved in the US, according to some analysts.
BlackRock is the world’s largest fund manager, with more than $9 trillion in assets under management. Its influence on the global financial landscape is huge, and its filing with the US Securities and Exchange Commission (SEC) at a time when crypto prices have jumped has attracted huge global interest and anticipation from other fund managers, as well as the cryptocurrency community and retail investors.
US research house Fundstrat forecasts a 75 per cent probability that the SEC will approve a spot bitcoin ETF, which would lead to the largest ETF launch ever. More are likely to follow, with six spot bitcoin ETF applications reportedly under review by the SEC, including from VanEck, Invesco and Fidelity, as well as BlackRock.
While spot bitcoin ETFs exist in various international markets, including in Australia, they have not been approved in the US. A spot bitcoin ETF aims to track the bitcoin price, exposing retail investors to the digital coin without having to direct the asset or trade through a cryptocurrency exchange.
Fundstrat estimates that a bitcoin ETF offered by BlackRock could add an extra $100 million in daily demand. “This [bitcoin ETF launch] would bring daily demand to $125 million, while daily supply is only $25 million. The implied equilibrium price would need to rise so daily supply matches daily demand.
“Equilibrium analysis suggests that a clearing price is US$140,000 to $180,000, before the April 2024 halving,” Fundstrat says.
Shane Langham, a senior private wealth adviser with Sequoia Financial Group and author of the Charting Wisdom technical report, expects bitcoin and the larger altcoins like Ethereum to rally if the SEC approves a bitcoin ETF, whether from Blackrock or another provider.
“Blackrock wanting to list a bitcoin ETF is a sign that the traditional financial system is now getting ready to accept it as a legitimate investment asset,” Langham said.
“Given this stamp of endorsement, I would not be surprised at all if bitcoin and the larger cryptocurrencies would rally,” he added. “They have already done well before the traditional financial system showed any interest. Add to this the bitcoin halving coming up in April 2024, and this is another catalyst for the price of bitcoin to rally.”
High-net-wealth individuals have clearly shown enough interest in a bitcoin ETF for BlackRock to believe it will be worthwhile establishing one, Langham added.
“Other asset managers won’t want to miss the boat on bitcoin and crypto, so they will be working to have their own products approved, and the Blackrock move will just speed this along.”
Sarah Abood, CEO of the Financial Advice Association Australia, said most financial advisers still do not recommend cryptocurrency products, which are not regulated by the Australian Securities and Investments Commission. As a result, professional indemnity insurance is hard to source in this area, and financial advice on digital coin investments is very limited.
Moreover, digital currency entails additional risks to traditional investments given the novel form of its investment structure.
“Currently, investment in crypto assets is as much in relation to the asset itself, such as an ether coin or a non-fungible token, as a bet on the sustainability of the technology platform supporting the asset, for example the Ethereum blockchain,” Abood said.
“Ensuring consistency will reduce confusion for Australian investors and financial service providers.”
