BTC Price to Soar on ETF "Inevitability": de Vere Group

Bitcoin exchange-traded funds are "an inevitability", that will send the price of BTC soaring.

This is according to the CEO of de Vere Group, Nigel Green, following news the U.S. Court of Appeals sided with Grayscale in a lawsuit against the Securities and Exchange Commission (SEC).

"This is a landmark legal win for crypto against the US regulator," says Green.

Above: BTC at four-hour intervals.

Grayscale is seeking to force the SEC to allow it to convert the Grayscale Bitcoin Trust to an ETF.

Spot ETFs invest directly in underlying assets, typically stocks or bonds, at the current market price (spot price).

They aim to replicate the performance of a specific index or asset class by holding a portfolio of the actual securities that make up the index.

"The court’s decision destroys the SEC’s central argument for rejecting every spot Bitcoin ETF over the last few years," says Green. "I believe that court decisions and positive legal news related to cryptocurrency assets like Bitcoin will undoubtedly impact their prices."

The price of Bitcoin (BTC) rose by 6.22% on the news to $27726/btc.

"The court's support for the Grayscale ETF is seen as an encouragement for further institutional investment products for cryptocurrencies. This could lead to increased interest from investors and major institutions in the market, potentially driving up demand for Bitcoin and other Cryptocurrencies and assets," says Rania Gule, Market Analyst at XS.com.

de Vere Group, an asset manager, says this win paves the way for further Bitcoin ETFs.

“Following the monumental ruling, there’s very little chance now the SEC will block the launch of ETFs," explains Green.

More big-name asset managers have filed ETF applications for Bitcoin ETFs and de Vere Group expects that the SEC will organise a block approval of applications that meet requirements, as it will not want to be seen as a kingmaker.

“We believe that Bitcoin ETFs are now an inevitability. And they could come to market sooner than many anticipate," says Green.

He believes the price of crypto will jump if/when Bitcoin ETFs are launched for three reasons.

“First, if Bitcoin ETFs are approved, it would open up the cryptocurrency market to a broader range of investors who might have been hesitant to directly invest in digital assets. This influx of new capital from institutional and retail investors could drive up demand for Bitcoin, leading to an increase in its price.

“Second, ETFs typically involve the purchase of the underlying asset by the fund managers. If Bitcoin ETFs follow this structure, it could create a substantial demand for actual Bitcoins to back the ETF shares. This increased demand, coupled with the limited supply of Bitcoin (capped at 21 million coins), could lead to a supply-demand imbalance, resulting in a price surge.

“And third, the launch of Bitcoin ETFs might improve the overall perception of cryptocurrencies in the eyes of regulators and traditional financial institutions. This increased legitimacy could attract more conservative investors who were previously wary of the regulatory uncertainties surrounding cryptocurrencies. As more institutional money flows into the market through ETFs, the price of Bitcoin would experience upward pressure.”

deVere expects that the first Bitcoin ETFs will be available in Quarter 1 of 2024 “if not before.”