17th October 2023 > > ETFs and Aussies.

tl;dr

Fake news about BTC ETFs perhaps gives us an insight into how markets will react when the news is for real. The Aussies are at it again. A long-term pleasing BTC price forecast for fun only.

Market Snap

Market Wrap

Fake news that Blackrock’s iShares spot BTC ETF had been approved saw a $1,500 rally which completely reversed just five minutes later. Still, it seems to have left us in a better place – who knows how much of a pump it might have been if the news had not been almost immediately denied.

The important question – to which the exact answer is unknowable – is just how much demand do Blackrock et al have for immediate execution. The AUM of asset managers with an application for a spot BTC ETF is $15 TRILLION, or thereabouts. Assuming all spot BTC ETFs are approved at the same time (an outcome to which I have assigned a high probability) just 1% of this total AUM adds $7,000 to the price of BTC. 4% doubles the price. I think we are likely in that range, so $35k to $56k is my landing zone, wide as it may be.

Larry Fink, CEO of Blackrock, weighed in with his thoughts:

“I was busy all day, I only heard it an hour ago. It’s an example of the pent up interest in crypto. We’re hearing from clients around the world about the need for crypto. Crypto will play the role of ‘flight to quality.’”

Client demand – that is what is driving the interest in spot BTC ETFs from all these asset managers. This will be new money coming into BTC.

When we have dealt with that little piggy, how does that leave alts? Will they join the party, or will they be forever more consigned to the dustbin of history?

Curious Cryptos’ Commentary – Australia

Now that Australia, unwittingly or otherwise, has signposted the way forward to mitigating the pernicious effects of CBDCs (https://www.curiouscryptos.com/post/15th-october-2023-rejoice-the-cbdc-killer) there is more good news from our antipodean friends.

The government yesterday released a Proposal Paper entitled “Regulating Digital Asset Platforms”:

https://treasury.gov.au/sites/default/files/2023-10/c2023-427004-proposal-paper-final.pdf

The intention is to gain feedback on proposed legislation:

“The Government is working to introduce a regulatory framework for entities providing access to digital assets and holding them for Australians and Australian businesses. The reforms target identified consumer harms, while supporting innovation in the uses of digital assets and emerging technologies.”

The following 59 pages (remember – the CCC reads it all, so you don’t have to) sets out a series of proposals, and several questions. Responses to those questions are requested by 1st December 2023. I have never quite understood why the bureaucrats take so long to do their work, whilst demanding that the private sector accomplish tasks in a much shorter time-frame. I suspect the double standards might stem from a sense of self-entitlement, but I have never been close enough to a civil servant to find out. That might be because they are always at home.

The interesting part of these proposals is that regulation will be aimed at digital asset providers – those who facilitate access to digital assets, and those that custody digital assets.

This is mightily like the regulation of TradFi services, and there are benefits to this approach.

The part I like most is that the regulation is not aimed at specific cryptos, in stark contrast to the SEC’s obsession with classifying cryptos as securities or commodities. It’s clear the motivation for that obsession, but it is a major obstacle to the SEC’s raison d'être – the protection of investors’ interests. It appears obvious, to me at least, that Australia is taking a more pragmatic approach that has a much greater chance of fostering innovation and development in the crypto industry.

What more favours will the Aussies do for us next?

Curious Cryptos’ Commentary – BTC price estimate

It’s been a while since we played the BTC price prediction game (*), so let’s look at one from Anthony Scaramucci, founder and managing partner at SkyBridge Capital.

Anthony’s base case is that BTC will reach a $15 TRILLION market cap, a significant increase on today’s $600bn. The reason is simple – he believes BTC is a better store of value than gold. The market cap of gold currently sits at $13 TRILLION.

If Anthony is right (and you all know my feelings about that) this would imply a price per BTC of more than $700k. Every $10k of BTC today would be worth $250k. Of SkyBridge Capital, Anthony says "we own a lot of bitcoin here."

I think Anthony and I could be very good mates.

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(*) In the pages of the CCC I mean. I play it all day long in my head.