“The Great Accumulation Race” for Bitcoin has been sparked by renewed optimism for an approved Bitcoin spot exchange-traded fund (ETF), according to industry experts. Several major players in the investment industry, including Fidelity, Invesco, Wisdom Tree, and Valkyrie, have recently applied for a Bitcoin spot ETF with the United States Securities Exchange Commission (SEC), following in the footsteps of investment giant BlackRock. Analysts believe that this wave of ETF applications is one of the key factors behind Bitcoin’s 19% price surge to $30,240 since June 16.
Cameron Winklevoss, the co-founder of the Gemini cryptocurrency exchange, suggested that “The Great Accumulation” of Bitcoin has commenced between institutional investors and retail investors. He compared buying Bitcoin before the ETFs are publicly available to making a pre-Initial Public Offering purchase, emphasizing that the opportunity for purchasing Bitcoin is rapidly closing.
MicroStrategy’s Executive Chairman, Michael Saylor, echoed this sentiment, stating that the window to front-run institutional demand for Bitcoin is narrowing.
“The window to front-run institutional demand for Bitcoin is closing.”
Bitcoin ETFs
BTC’s current trading price stands at $30,240, and the Crypto Fear and Greed index has surged from 49 (Neutral) to 65 (Greed) in just the past two days. In an interview with CNBC, Bitcoin investor Anthony Pompliano anticipated a tug-of-war between retail investors and Wall Street. Pompliano noted that institutions and individuals are scrambling to acquire their share of the limited 21 million BTCs that will ever exist. While retail investors currently hold a significant portion of BTC, with 68% remaining unmoved for over a year, Pompliano expects BTC to become highly illiquid when Wall Street and institutional investors enter the market.
Dylan LeClair, a BTC analyst and founder of 21st Paradigm, observed that BTC’s price has become extremely inelastic, more so than ever before. The recent ETF filings have acted as a catalyst for substantial inflows into the market. However, LeClair predicted that the SEC is unlikely to approve any ETF applications until at least January or February 2024.
Despite the anticipation surrounding BTC ETFs and the increasing institutional interest, it’s important to note that BTC initially achieved significant market cap growth without much institutional participation. BTC investor Pompliano reminded the public that BTC went from zero to nearly a trillion-dollar market cap with minimal institutional involvement. He believes that when Wall Street and institutional investors enter the market, BTC will become highly illiquid as retail investors are hesitant to sell to institutional players.
The race to accumulate Bitcoin is intensifying as the prospect of approved BTC ETFs gains momentum. Major financial players are vying for a slice of the limited supply of BTC, leading to a surge in prices. However, the approval of ETF applications by the SEC may still be some time away, prolonging the tug-of-war between retail investors and institutional demand. The market is witnessing increased interest and inflows, but the true impact of ETFs on BTC’s liquidity and price dynamics remains to be seen in the coming years.
