3 Weiss Crypto Experts Break Down the Bitcoin ETF Impact

by Jurica Dujmovic
By Jurica Dujmovic

Our recent Weiss Crypto Daily lineup has mentioned a few times that our crypto team believes the approval of the spot Bitcoin ETFs was a watershed moment for crypto adoption and legitimization.

But that’s honestly just the surface of what our experts see in the aftermath of the approval.

There are many lingering questions coming to the surface now that the excitement has started to settle, such as ...

Whether Bitcoin's accessibility and decentralized ethos will remain intact amid Wall Street's growing influence …

Or if individual autonomy will be compromised by the consolidation of institutional power and wealth ...

And what about the regulatory implications? Will emboldened regulatory frameworks hinder mass participation?

To answer these questions and more, I interviewed our team members to bring you even further behind the scenes and into the minds of our analysts.

First up is Crypto Yield Hunter contributor Marija — pronounced “Maria” — Matić.

She believes the ETFs could drive significant long-term price increases. After all, most coins are held by long-term holders unwilling to sell. As such, scarcity and supply/demand imbalances could exert substantial upside pressure over time.

According to her, funds will likely recognize Bitcoin’s limited supply available on the open market and bid for it.

More than that, Marija’s attention is on the risk that large institutions may gain excessive control through ETFs.

In a decentralized market like crypto, that is a reasonable thing to worry about. It could create the perfect environment for price manipulation against less sophisticated investors.

Dr. Bruce Ng, co-editor of New Crypto Wonders, shares Marija’s control concern. He believes there is a notable risk that Wall Street institutions could compromise decentralization if a single entity dominated the Bitcoin supply.

But given these firms structured the products, major risks seem less likely from the institutional perspective specifically.

Marija contends that Bitcoin itself remains fundamentally accessible and affordable through endless divisibility. She notes that perceptual barriers around price levels can shift, and tools like stock splits could adjust ETF share prices to counter retail "unit bias."

And Dr. Bruce points out that Bitcoin has recovered from past centralization threats before. That was back when node operators coordinated to deter excessive consolidation of power.  

Beyond just price action, Dr. Bruce has concerns over additional institutional interference in crypto.

Expanding on Wall Street's potential influence, he foresees institutions taking an increased role in the operation of crypto. Areas like mining, for example, could be considered as the next step for institutions as revenue opportunities.

In that case, it’s not unreasonable to expect independent mining profitability to decline as a result. That is another way institutional involvement would threaten decentralization.

It would give those larger players the chance to consolidate control over security operations.

Not only that, but where Wall Street goes, regulators are sure to follow. I’ve said before that regulation is another path to increase adoption. The caveat is that regulators need to understand the ethos and operation of what they’re regulating. Often times, we’ve seen that when it comes to crypto, they fall quite short.

Success in this area could lead to increased investor protections, clarity for institutions on how and where they can invest and boost legitimacy and investor interest.

But poor regulation can do the exact opposite and hinder decentralization — a core component of crypto ideology. That’s what separates cryptos from other types of digital assets.

Our experts will be keeping a close eye on the regulation conversation. But for now, Marija and Dr. Bruce agree that any barriers to entry for Bitcoin will likely be more perceptual than systemic.

Still, the dynamic between the institutions of Wall Street and the core ideology of crypto will require ongoing monitoring by the crypto community.

When it comes to his long-term outlook, though, Dr. Bruce on the whole agrees with Marija. In fact, he believes the approval could be the long-term force that’ll push Bitcoin through to new all-time highs.

However, it should be noted that he expects some initial volatility.

And it’s not hard to understand where Dr. Bruce’s outlook is coming from. It mirrors gold’s trajectory after the launch of gold ETFs in 2004. Considering Bitcoin’s well-established correlation to gold, it’s a fair basis for comparison.

His take is that Bitcoin’s solid fundamentals should prevail over the near-term choppiness without too much fuss thanks to improved optics and liquidity from Wall Street participation.

Dr. Bruce also expects now that we have a spot Bitcoin ETF, the path is cleared for additional ETFs for other assets that can meet the same standard.

Indeed, Juan Villaverde, our Weiss Crypto Portfolio and Weiss Crypto Investor editor, believes the same. In fact, he’s already told you to expect investor excitement to migrate to Ethereum (ETH, “B+”). The No. 2 crypto by market cap already has ETF applications waiting with the Securities and Exchange Commission.

But Juan isn’t only focused on the rotation of liquidity within the crypto market.

He predicts a profound capital rotation out of questionable sovereign bonds into alternative digital stores of value, like Bitcoin. 

According to him, this will be driven by deteriorating trust in debt-burdened governments’ capacity to repay bonds without currency devaluation. He has previously cited China’s investors fleeing the Chinese bond market as precedent.

And most went straight to assets like gold and Bitcoin.

Given these dynamics, he argues Bitcoin’s monetary attributes make it a prime destination for migration. The recent legitimization and accessibility provided by the spot ETFs only bolsters this outlook.

Juan explains that the vast majority of global wealth now sits in sovereign bonds with eroding underlying value. But faith in central banks’ ability to repay without sparking inflation has been faltering as of late. And when it continues to erode, Bitcoin and other alternatives will become increasingly appealing.  

But don’t expect a tidal wave to hit all at once. We’re likely to see an initial trickle before the big surge.

The reason, according to Juan, is that Bitcoin — despite having lost the wild ways of its youth — is still a volatile asset compared to most in the TradFi sector. And crypto itself is a volatile market.

While we in the crypto space may be desensitized to these realities, many of the new investors coming into the space won’t be. It’s not unreasonable for investors unfamiliar with the crypto cycles to be unsettled by the relatively extreme swings we consider standard.

For example, in a bull market like this one, a correction can result in Bitcoin dropping 15%-20%. Experienced crypto investors won’t even bat an eye at that. But for newcomers, seeing a 20% loss can be shocking.

Eventually though, Juan believes this uncertainty and unfamiliarity will fade away. That’s because compared to assets like gold, crypto markets remain relatively small.

That means there’s a staggering upside for Bitcoin as recognition grows of its advantages in transportability, auditability and predictable supply. 

Even conservative estimates point to Bitcoin’s current market cap radically undervaluing its utility.

And unlike Marija and Dr. Bruce, Juan isn’t concerned about the ETFs facilitating a consolidation of power.

Rather than mechanisms to consolidate ownership, Juan sees instruments like ETFs as tools to further democratize participation for those lacking resources or technical proficiency to directly hold the asset.

As crypto bridges more deeply into traditional finance, complex tensions around centralization, governance, equity and accessibility will continue unfolding.

Our experts’ conviction in Bitcoin’s resilience in the long term is undeterred. Still, they acknowledge the bumps that litter the road to mass adoption and are actively looking for how best to avoid them.

That’s why I urge you to keep checking in on your Weiss Crypto Daily updates every day. Our experts are constantly finding new opportunities and avenues for you to navigate the crypto sector … without the fear, uncertainty and doubt new crypto investors will face.

And if you’re looking for more insight, I suggest watching Juan’s recent Crypto Convergence briefing. In it, he breaks down the two remaining events that are set to send Bitcoin even higher. And he’ll reveal the three altcoins he believes can outperform it.

As for my take, I believe that the fluctuating power dynamics between the wave of Wall Street investors and crypto purists means it’ll be a challenge to maintain Bitcoin's founding principles and democratized participation.

That said, the No. 1 crypto by market cap has fought off such power grabs before. If it can this time, the entire market will benefit.

The upcoming months will reveal the trajectory of this struggle. So, look to future Weiss Crypto Daily issues to keep you informed and ready to act.

Best,

Jurica Dujmovic

About the Contributor

Jurica Dujmović has been a creator, collector and investor in digital art, including the rapidly evolving non-fungible tokens (NFT) space since its inception nearly a decade ago. He’s also passionate about digital currencies and writes about crypto trends, including what’s new in the Weiss Crypto Ratings, in Weiss Crypto Daily. 

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