The world of Bitcoin is abuzz with anticipation as the prospect of a spot exchange-traded fund (ETF) for the popular cryptocurrency begins to take shape. Renewed optimism over the approval of an Exchange Traded Fund dedicated to bitcoin has triggered a recent surge in prices, which reached $30,240 since 16 June. Industry experts are heralding the beginning of what they call “the GreatAccumulation Race” as large investment firms such as Fidelity, Invesco, WisdomTree and Valkyrie join BlackRock’s attempt to register an ETF for Bitcoins with the Securities Exchange Commission.
According to Cameron Winklevoss, co-founder of the famous Gemini crypto exchange, the accumulation of Bitcoin has already begun among institutional investors and retail investors. Winklevoss drew parallels between buying Bitcoin prior to the launch of ETFs and investing in a pre-Initial Public Offering, emphasizing that the opportunity for buying Bitcoin is rapidly diminishing. He pointed out that the “floodgates” of investors entering the market are rapidly closing, indicating an urgent need to position themselves in a favorable way.
Supporting Winklevoss’s perspective, MicroStrategy Executive Chairman Michael Saylor warned that the window to front-run institutional demand for Bitcoin is narrowing. Saylor suggested that retail investors might be pushed aside in the race for a share of the limited 21 million Bitcoins in existence as institutional demand increases. Soon, the dynamics on the market could shift favoring institutional investors and potentially leaving retail players with fewer opportunities to buy bitcoin.
The surge in bitcoin’s price and its increased interest by institutional investors have led the Crypto Fear And Greed Index jump from 49 Neutral to 65 Neutral within two days. This metric indicates growing market sentiment and a more positive outlook for Bitcoin. However, Bitcoin investor Anthony Pompliano highlighted the impending tug-of-war between retail investors and Wall Street. Pompliano noted that much of the current supply of Bitcoin remains stagnant, despite the fact that retail investors have enjoyed an early start and have accumulated a significant proportion of the current supply. He believes that when Wall Street and major institutional players enter the market, Bitcoin could become highly illiquid as retail investors may be reluctant to sell to larger entities.
Dylan LeClair, a bitcoin analyst and founder of 21st Paradigm, delivered a tempered perspective in the midst of excitement and anticipation regarding possible approval of an ETF related to Bitcoin spot trading. LeClair predicts that the SEC will not approve any ETF applications until at least January or February 2024. Despite the delay, recent ETF registration activities represent an important source of capital inflows to the market. LeClair also observed that the price of Bitcoin had become more inelastic than before, which suggested that it was less prone to fluctuations as a result of increased institutional interest.
Market participants are closely watching developments in the regulatory environment as the race for Bitcoin accumulation intensifies and the possibility of a Bitcoin spot ETF becomes more visible. The approval of an ETF for Bitcoin spot could have a profound effect on the cryptocurrencies market, shaping its future in terms of acceptance and potential further price appreciation. The issue of intense speculation remains whether retail investors can maintain their advantageous position, or whether institutional demand will overshadow them. As the world watches the end of “The Great Accumulation Race,” the Bitcoin market is expected to experience significant changes in the coming months.
Lindrea, B. (2023, June 22). “The great accumulation” of bitcoin has begun, says Gemini’s Winklevoss. Cointelegraph. https://cointelegraph.com/news/great-accumulation-bitcoin-begun-gemini-cofounder-winklevoss