Experts from Grayscale, Tether and the Chamber of Digital Commerce reached a unanimous conclusion at Benzinga’s virtual Crypto & Blockchain Outlook webinar Thursday: the spot Bitcoin ETF approval has taken the cryptocurrency space from “not relevant to relevant.”
But does this mean cryptocurrency is — finally — going mainstream?
ETFs A ‘Big Victory For America’: Brock Pierce, co-founder of Tether USDT/USD, sees a “more resilient Bitcoin” after the decision. The approval is great for American businesses and a “big thing” for investors to safely access the market, he said.
Pierce also said the desire to embrace the world’s biggest cryptocurrency exists “at the national level.” This may not immediately mean countries following the example of El Salvador. But, as Argentina shows, there is appetite for experimenting with Bitcoin for daily use cases.
Most interestingly, Pierce said the probability of government intervention and a “war on Bitcoin” has “substantially decreased.”
Still, prices haven’t kept up with the bullish expectations from industry experts. A surprise?
Grayscale’s ‘Incredibly High Level’ Of Conviction: Not at all, says Grayscale’s global head of ETFs David LaValle.
Grayscale expected significant Grayscale Bitcoin Trust GBTC outflows following the conversion of its trust into an exchange-traded fund, LaValle told the Benzinga webinar.
A “100% market share” was not to be expected, but that does not deter Grayscale from being “incredibly bullish” on the asset class, he said.
“The approachable ETF,” as LaValle jokingly called it, sees Bitcoin BTC/USD as a digital store of value. The SEC’s decision set a precedent that LaValle said he hopes will allow Ethereum ETH/USD to follow. Still, he puts the chances of a spot Ethereum ETF approval at only “50-50.”
BlackRock’s Pivot … Why Now? In the panel discussion, participants weighed in on Larry Fink‘s 180 on digital assets – the BlackRock CEO went from seeing Bitcoin as an “index of money laundering” to “big believer.”
Alex Chizhik, COO of the Chamber of Digital Commerce, said BlackRock started to see the demand in the market and decided to act on it. Unlocking Bitcoin as an investable asset class also allows funds to offer other financial products such as Bitcoin options ETFs.
The panel agreed that a Pandora’s box of mainstream cryptocurrency investment products has not yet been opened.
The SEC Will Remain Formidable Adversary: Stefan Rust, founder of Truflation, does not see the relationship with regulators improving any time soon. They will still fight cryptocurrency entering the mainstream “tooth and nail,” he said.
Europe is the best example of this, according to Rust.
MiCA, the EU’s framework for cryptocurrency regulation, is comprehensive and was praised by the panel. But it also adds friction, such as the need to report transfers above 1,000 euros. This is alienating innovation and skilled professionals, driving them to more business-friendly locations like the United Arab Emirates and certain countries in Asia.
Chizhik agrees, citing “skirmishes” on Capitol Hill over different aspects of the industry like accounting rules or crypto mixers. He said he fears the U.S. is too slow to provide regulatory clarity and in danger of ceding its financial leadership.
If Crypto Goes Mainstream, Does Bitcoin Replace The Dollar? The panel closed with a discussion about the dollar’s role following the entrance of Bitcoin on the main asset class stage.
The unanimous conclusion: Bitcoin could become the “sound money” base layer but will not replace the dollar. The network effects from global dollar liquidity are simply too big for that to occur.
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