Is Slow Walk of Bitcoin ETF Holding BTC Value Down?


The Andreas Kaplan we know and love is back to talk about the price of Bitcoin, which is still under pressure in the post-Thanksgiving market.

In looking at the one-month chart you can see how the previously “stabilized” cryptocurrency value fell off a cliff midmonth and continued to tank right after Thanksgiving.

Back in the fall, everyone was speculating about the future with Bitcoin around $6,500 – now it hovers just above $4,000.

A new piece in Smartereum today in gives some pretty good reasons for the price difference and outlines some good news on the horizon.

We reported last week on some word salad put up at Smartereum under the Andreas Kaplan byline – today’s article represents a return to form and substance.

“It appears that bitcoin’s (BTC) value is on a rollercoaster ride,” Kaplan writes. “The digital currency’s share price rose to its record-breaking high of $19,346 last year. …The value has been shaky for a while now. It soars each month and plunges in the same breath.”

Although Kaplan kind of overwears the roller coaster metaphor, the point is it’s true that Bitcoin has been extremely volatile by any measure.

In fact, in a segment called “why is the crypto market going down?” Kaplan essentially cites volatility – and a lack of comprehensive security.

“Sadly, security issues are affecting the trust as well as bitcoin use,” Kaplan explains. “Some notable events happened last year when two exchanges were robbed of their funds. Cyber thieves have also stolen lots of money from crypto exchanges.”

However, he is also not discounting bad press.

J.P. Morgan’s Jamie Dimon seems to go back and forth on cryptocurrency. After calling it a scam and a fraud last year, he retracted his comments and stayed fairly mum for a while. But the banking strongman has been bashing Bitcoin again recently and Kaplan posits that some of this bluster along with actual policy – J.P. Morgan forbidding workers from investing in Bitcoin – is having an effect on Bitcoin value.

It’s Kaplan’s third reason, though, that maybe engenders the most cause for hope.

Essentially, Kaplan is saying that the SEC’s failure to approve a Bitcoin ETF is also pushing prices down. If that’s true, Kaplan and others expect a meteoric rise after the ETF is eventually approved.

Here’s the latest from that front:

Hacked and other sources are reporting that various Bitcoin ETF proponents met with SEC regulators last week and argued for a rule change that would allow the first publicly listed crypto fund.

“The proponents’ argument centered around the idea that the bitcoin market is mature enough to support an ETF, and at present looks similar to markets for other assets which already have such products,” reports Nikhilesh De at CoinDesk. “The presentation gave several examples of assets that already have ETFs, including crude oil, silver and gold.”

Although the pathway to approval is not yet clear, some believe a BTC ETF is coming our way sooner than later, although indications from SEC officials don’t favor the move happening in the immediate future.

SEC Chairman Jay Clayton is on the record saying that Bitcoin is currently too volatile to back an ETF:

“What investors expect is that the trading in that commodity that’s underlying the ETF is trading that makes sense, is free from the risk or significant risk of manipulation,” Clayton said late in November at a New York conference. Those kinds of safeguards don’t exist in many of the markets where digital currencies trade.”

Some people expected to have a result by now, but analysts are saying it may be as late as February or beyond before there’s definitive word on the Bitcoin ETF. Having said that, if you feel fairly confident that the ETF is going to be approved, it doesn’t really matter too much whether it’s in February, March or April – you get a nice entry point now, you build your Bitcoin holdings, and you cash out after that big spike happens – or hold on for more future gains.