Is Bitcoin’s big market really coming? !In-depth analysis by industry insiders: The price by the end of 2025 should be in 6 digits
FX168 Financial News (North America) News Bitcoin investors are waiting for regulatory approval of the first spot Bitcoin exchange-traded fund (ETF) in the United States. The probability of the U.S. Securities and Exchange Commission (SEC) approving the fund is as high as 90%.
“Their chance of approval is 90 percent,” said Frederick G. Thiel, chairman and chief executive officer of Marathon Digital Holdings. “The question is whether they approve it now or in January, when more applications will be approved. Approved?” Marathon Digital is a digital asset technology company and the world’s largest publicly traded cryptocurrency miner by computing power.
ETF approval wave
At least nine asset managers — including BlackRock, WisdomTree, Valkyrie and others — have filed for spot Bitcoin ETFs. Thiel expects five applications to be approved simultaneously.
He said: “My personal view is that they will approve a batch of ETFs, and the SEC has been actively talking to Grayscale and others, which is a lot more advanced than before. It means they are going to double-check and make sure everything is done and ready to go. .”
After BlackRock applied for a spot Bitcoin ETF in June 2023, it caused a surge of market optimism and triggered a wave of new ETF applications. The involvement of BlackRock, the world’s largest asset manager with more than $9 trillion in assets, brings a sense of institutional validation and raises expectations for Bitcoin’s future. BlackRock’s filing and the subsequent ripple effects in the industry have boosted confidence and reinforced the belief that Bitcoin is gaining wider acceptance and mainstream recognition as an investment asset. This sentiment fueled market enthusiasm, leading to a significant surge in trading volume and price during the period.
Bitcoin price surge and future predictions
Last week, Bitcoin prices hit an 18-month high, rising to $37,970. Bitcoin’s price has more than doubled since the start of 2023, but remains well below its November 2021 peak. Marathon’s model has made a price prediction for Bitcoin, suggesting that its value could rise significantly by 2025.
“By January 2025, I think the likely scenario will be between $50,000 and $80,000,” Thiel continued. “I think by the end of 2025, if Bitcoin follows historical cycles, that’s when we start to see Bitcoin 6 When the price is in the digits.”
Buying on rumors or selling on news?
Ahead of the potential SEC approval of the first U.S. spot Bitcoin ETF, Thiel offered his insights into the expected market reaction.
“In this case, the norm is to buy based on rumors and sell based on news. However, with Bitcoin ETFs, we may see a more complex pattern. After the approval announcement, the initial reaction may be a surge in Bitcoin prices. The first wave will then give way to a more careful analysis of how much capital is invested in these ETFs,” Thiel explained.
He highlighted Bitcoin’s unique situation as a speculative vehicle and ETF commodity that could drive demand for it, leading to potentially self-reinforcing price increases.
Thiel added: “The real market indicator will be the trading activity of these ETFs post-approval. Strong initial investment may further push the value of Bitcoin, while lackluster investment may lead to a market correction. Speculation on Bitcoin’s potential price trajectory nature and dynamics to cope with the development of ETFs.”
The Impact of Spot Bitcoin ETFs
U.S. investors can currently purchase Bitcoin futures ETFs, which own Bitcoin futures contracts or agreements to later buy or sell the asset at an agreed-upon price. The long-awaited Bitcoin spot ETF will invest directly in the digital asset. Thiel emphasized the importance of the convenience and accessibility that a spot Bitcoin ETF would bring to the market, similar to what a gold ETF would do for gold investments.
“By removing friction, making it more secure, making it easier for people to hold Bitcoin, it will significantly increase the allocation to Bitcoin, and you will also have a retirement account that can invest in Bitcoin for the first time because of ETFs,” Thiel said.
Bitcoin becomes an uncorrelated asset
Thiel said that Bitcoin is transforming into an uncorrelated asset, “The correlation with stocks has weakened. As an inflation hedge, the correlation with gold has weakened. I think in a world full of uncertainty, Bitcoin Bitcoin believers will only redouble their efforts and move more assets to Bitcoin.”
Commenting on how Bitcoin, which is supposed to be viewed as a safe-haven asset, responds to escalating geopolitical tensions, Thiel said: “In developing countries where there is high inflation, currency controls and unstable governments, Bitcoin becomes a personal currency. means to protect their assets and ensure easy transportation, security and autonomy. Including the crisis in Ukraine, people on both sides of the conflict have turned to Bitcoin. If the current conflict spreads to the wider Gulf region, it may cause more people to adopt Bitcoin Seek asset protection and self-sovereignty.”
In addition to market movements influenced by ETFs, the Bitcoin community is also paying close attention to the upcoming halving event. Bitcoin halvings are scheduled to occur every 210,000 blocks (approximately every four years) until the network generates a maximum supply of 21 million Bitcoins.
The next Bitcoin halving is expected to occur in April 2024, when the number of blocks will reach 740,000. The block reward will drop from 6.25 Bitcoin to 3.125 Bitcoin.
Historically, halvings have been a catalyst for large price swings. Currently, miners release approximately 900 Bitcoins per day, and this number will decrease to 450 Bitcoins per day.