BREAKING: Spot Bitcoin ETF Receives Official Approval From The SEC

Approval of the Spot Bitcoin etf. It's been a wild ride, right?

Oh, my God. It's been a long time coming. It feels like the last two days has been several weeks. I've just been. If I close my eyes, all I can see is the Twitter ui, just where I've been refreshing and reading things over and over. But it's good to. It's good to finally have it done and dusted. And now we get onto the good part, you know, we get to see what. What happens next, which is what we've all been speculating about.

Yeah, it's. It's been the same for me. I have been scrolling my Twitter feed for hours already and there were a lot of false flags saying, you know, the Spot Bitcoin ETF was approved. And. But it was very, very tough to distinguish, like, the real approval from these 2 tons of fake news that were going on on Twitter. But we finally got it.

Yeah, yesterday was pretty crazy, really, with the, you know, the false positive and the hack and everything. Today's episode of the Rising crypto podcast, that's what we covered. It was just what happened yesterday and the. The craziness that unfolded it really. It's so. It's so bizarre and I know it's. It's being investigated at the highest level, but you saw how much the market moved on that news, and I think it's going to be interesting to see how that unfolds from this point. You know, what we see with how it reacts now that we actually have the official news out there, whether it'll be the same, whether Ethereum will do as well as it did, I think it's hard to call.

Yeah. Because actually, before we get into actually the historical significance of this event, maybe for those who don't know, who haven't followed closely this event as we have yesterday, there was a fake tweet that came out from the SEC that turned out to be fake. Basically. Someone apparently took control of the account, the Twitter account of the sec, because they didn't take the security measures, the proper security measures to keep the account safe. And they announced the approval of the etf, even though the ETF was not approved yet. And that caused absolute chaos. Today we are seeing something also a bit weird because the announcement was on the website of the sec and then it was immediately taken down for some reason. So that was also sparking some doubts that the ETF was actually approved. But apparently it has been approved this time.

Yeah, it was only up for about two minutes, I think. And obviously everyone was going crazy. Everyone was trying to read the document, download the document, and then the page started 404 erroring. I think it's gone down a few times. Then it looks like it's just teething issues. I know there was still, there's still some naysayers on, on Twitter that are instantly saying, oh no, it's, you know, it's, it's another fake release. But I think we saw Bloomberg's Eric Balconas and James Safart both saying that it looks like the document they expected and all 11 applicants as well, which is good news.

Well, I kind of understand why there are still people that are in doubt after all this crazy issues that we saw yesterday. But yeah, let's maybe get into the matter. So the etf, the SPOT Bitcoin ETF has been approved. And so why is this historical? It's historical because it's something that we have been waiting, that the crypto space has been waiting for around a decade, right?

Yeah, I mean it's been, it's been going on for so, so long. I think it is almost 10 years since it first started. To be honest with you. I don't, when I, so I joined the space about six years ago, I don't really remember the conversation over the ETF being that prominent back then. But in the last couple of years it's, it's obviously really heated up, particularly with blackrock and the grayscale legal case, which without that we wouldn't be here today.

Yeah, exactly. Because apparently these spot Bitcoin ETFs were constantly rejected across all these years. And only this year we had something moving that was very important, which as you said, is the filing by the, by BlackRock, which sort of was the watershed moment. Right? It was sort of the watershed moment that everybody was waiting for. I think that Robert dropped off, but he will, he will join me in a second. But yeah, so for those who don't know, basically. Hey Robert, nice to see you again. Just wrapping up. I was just trying to make people understand why this BlackRock fighting that we saw a couple of a few months ago was such a watershed moment for this whole SPOT Bitcoin ETF saga. Do you have any thoughts on that?

Well, they don't miss really, do they? BlackRock? I think they've only ever had was it one rejected and you know, tons and tons and tons approved. So they're a pretty strong indicator when they apply. It's going to happen eventually. But I think one of the bigger, the big fears was that it wouldn't happen this time round. Like we're still not there even if it was going to happen eventually. How long. And I know some people were doubting that we would see the approval in January, we'd see it today. So I think, yeah, blackrock were as always integral in this sort of major move and. But I think it's probably, for me it's a dead heat between them and, and grayscale in terms of how we got to a spot. Bitcoin etf.

Yeah. Because now we're gonna have this competition going on. Right. Among all these different issues that were approved altogether and they are all going to compete with each other in terms of who has got the lowest fees as far as I understand. That's going to be the main, the main differentiator. Right.

Yeah.

And that that fee war has already started. Really the. So I, I thought that yesterday's S1 filings were sort of finalized for now and that was how the rates were going to be. But then we see today that there's been revisions to the rates. A lot of the issuers that were very high on their rates and had no waiver have both lowered their rates and added a waiver and some of them have added the 0% waiver for six months or $1 billion or $5 billion in, in BlackRock's case. So that I think that war is going to be ongoing, but it's certainly going to be interesting to see how the next few days play out because it moved so, so much in 24 hours.

Yeah. Although to be honest, I am pretty surprised to see the, the price reaction that we are. The price action that we are seeing right now. It seems that the cryptocurrency that is getting the most traction is not Bitcoin but Ethereum for some reason. Have you noticed that?

Yes, I have. So this happened last night and it was a bit, it caught me a bit off guard that Ethereum was the one that was getting the gains. And then people said that because that happened last night the market had showed its hand and it won't happen again. Apparently not. Apparently it is happening again.

Yeah. And we're going to have probably a market analyst on our show very soon who is going to give his expert opinion about what actually is going on with the market movements here. But we can certainly say that regardless of the short term price movements, the long term effect of this is going to be massive, Right?

Well, you'd think so. I mean, I don't have some extensive background in finance, but if you look at the obvious facts that we have. The increase in supply, sorry, the increase in demand is going to be massive. We've seen estimates, I mean, there's been a lot of estimates, but the one I've seen from the most reliable sources seems to be between 20 to 30 billion dollars of new money into bitcoin. And then in April, we have the halving event. So it feels like the two sides of the equation are both moving in the right direction for bitcoin's price. But it's so difficult to say with these things. And I said on the podcast last week, I think that, I think there's going to be some unknown curveballs that just occur, as is often the case with crypto.

Yeah, it's actually crazy that we're going to see the bitcoin halving coming up in a few months. In a couple of months. And it seems like the perfect storm, right? Like the perfect storm of supply and demand shock that is supposedly going to drive a huge price, price action for bitcoin and the whole crypto market. At least that's what, that's what it seems to, to, to, to say the logics. But of course we cannot say for sure what's going to be the effect. But I think this is the way to start a new bull cycle. But yeah, what I wanted to actually discuss is also the sort of ideological aspect of all this thing because actually, let's get to explain how the spot bitcoin ETF work in practice. I think we are being joined by Sam. Sam, how are you doing today?

I'm relieved it's all over. I mean, it's, it's been, it's been. Been quite the week. And yesterday was. I couldn't even believe that's even real, what happened yesterday. I mean, if I were, if I were a script writer in a movie, I wouldn't write that script. It's too obvious. Like it's. Who, who's gonna believe that, you know, on the day before it was supposed to be approved, the SEC from its original Twitter account tweets the approval, but it was hacked. But we live in the world of crypto where up is down and down is up. So I'm just relieved that it was approved and we can go about our business now, moving forward.

Right.

And I guess it was pretty stressful for, for you guys from the news, from the news team to keep track of all this to, to keep the pulse of what was going on.

Yeah, you know, it's been up and down and this has been in the Pipeline. Now, for a long time, everyone was zeroing in on January 10th. And, you know, I'm glad that the speculation turned out to, turned out to be true. It seems like along the way we got more confirmation that it was going to be approved. But yesterday was definitely a curveball, that's for sure.

Yeah. And actually I wanted to, I was just about to discuss the actual, like how this spot Bitcoin ETF will work in practice. Just like the basics for people that are following us now and they don't know exactly how a spot Bitcoin ETF work. Maybe you can briefly explain how it works and what's the novelty of it.

Sure. So I think many people know that an etf, the SEC previously approved a Bitcoin futures etf, but the spot ETF basically allows investors to gain access to actual physical Bitcoin, although through a fund. But what the spot Bitcoin ETF application does or what the filing does, is it allows basically anybody who has a brokerage account or has a registered account to actually get exposure to Bitcoin. So a lot of us who've been in the market for a long time, we buy and sell Bitcoin. We buy Bitcoin, we hold Bitcoin on our cryptocurrency wallets, we hold it on exchanges. But there's a bit of a learning curve to get up to speed on crypto and how it works with an etf. I mean, it's, it's basically anybody can simply gain exposure by buying shares in the etf. So whether through your financial advisors, whether through an investment account, a registered investment account, you can, you can now gain direct exposure to Bitcoin. And this is a big deal because it's believed that this vehicle will allow more investors, the layman, the person who doesn't quite understand the intricacies of the blockchain, to gain exposure to Bitcoin. So in terms of mass adoption, this potentially is a pretty big deal. And we saw that in Canada. You know, Canada proved to spot Bitcoin ETFs, you know, over a year ago now. And, and we've seen some pretty steady inflows into that product. As more institutional investors, more everyday people get exposure to or want exposure to Bitcoin, they can do it simply through a product that they're very familiar with, the etf. And that's why it was considered to be a pretty major victory for the industry today.

Yeah, and what I was thinking, though, is that now who is going to buy Bitcoin directly if there is such A product. What is the point in buying Bitcoin directly as we have been always doing? Are people going to switch entirely to this format or is people going to still opt for direct buying Bitcoin according to you?

I don't think those of us who've been in Bitcoin for a long time, those of us who are more blockchain natives or who've been in the market for a long time, I don't think we're going to change. I don't think we're going to switch. I mean you may, I mean there's certain countries, for example that provide tax benefits for investing in retirement plans, e.g. 401k, RSPs, etc. If you invest a portion of your income into those funds, you potentially get a tax break. So maybe for, for some people they'll start allocating some of their money towards Bitcoin funds in a tax deferred account. That way they can grow their, you know, exposure to Bitcoin in a tax free way. That, that's, that might be a possibility. But I think what this is going to do is it's going to potentially attract more people to the asset class. You're obviously you're not holding Bitcoin outright. I mean people invest in the ETF aren't actually holding physical Bitcoin. They're not storing physical Bitcoin but they're getting exposure to the market. And the idea is if that these funds grow in size and demand for the ETF shares grows, the fund issuers will have to acquire the physical Bitcoin to make it happen. So I don't see people who've been in the market with the Coinbase account, Kraken accounts rushing to the ETFs. I know I don't really have any plans to do so, but this is going to attract potentially a wider audience to at least start considering Bitcoin in a way that's a lot easier to manage. You know, seed phrases and all that sort exchange hacks makes a lot of people nervous, especially in the legacy finance system. This gives them a way to gain exposure without having to deal with all that.

Sam, I wanted to ask you. Obviously you've got a extensive background in crypto and I, I've always been a little bit torn on the spot Bitcoin ETF because on the one side I think it's what mainstream adoption looks like, particularly in the financial sector. But on the other hand it does feel kind of at odds with what Satoshi Nakamoto envisioned for Bitcoin. You're Buying bitcoin through a mainstream bank, that is kind of the opposite of what he was aiming at. Do you think there's any cognitive dissonance there or do you think that perhaps it's just a little bit blown out of proportion and this is what we just have to do if we want to see bitcoin grow?

Well, I mean, that's, that's a really good question. I, I don't, I mean, obviously a financialized bitcoin product, I don't really see that as being in line with Satoshi's vision for decentralized peer to peer money. So is it at odds? I mean, I would say so. If I own shares in a bitcoin etf, what happens if the government comes and confiscates the fund, for example, what happens then? Whereas if I actually self custody my bitcoin, nobody has access to it except me. So I think on a philosophical level, for a lot of the bitcoin purists, there probably is a bit of a tension there. But at the end of the day, I mean, the way bitcoin trajectory is going, and this is just my hypothesis, but it seems to be going more along the lines of a financial asset. Investors are buying bitcoin because they want to hedge against inflation, because they have low time preference, because they want to, you know, invest in an asset that they think is going to continue to grow as adoption grows, as, as we move from the physical analog of gold to a digital gold. So bitcoin does have a lot of value propositions, but I think right now it's really appealing to the financial market side as opposed to the peer to peer spending side. Although there are developments obviously happening on the payment side. But right now a lot of the things that I've covered over the years has been bitcoin as a financial asset. Obviously investors want this or else these various fund issuers wouldn't have spent all this time and all this money trying to make this happen. So there definitely is a, a contention there. I think bitcoin will be fine regardless. Those of us who are pure to the bitcoin message and who actually want to buy physical bitcoin, we know how to do it. We've been doing it. What this does is it increases Bitcoin's exposure to more people. And, but there is a risk there because, you know, not your keys, not your coins, obviously what's being held at Blackrock and VanEck, you don't have direct access to. So there is, there is that risk there. So I definitely think that There is an inherent tension, but that's just the way the way things work as you try to achieve more mainstream adoption of these financial assets.

Yeah, I think it's an acceptable trade off for many people. It's just one more option, you know, like if you wanna, if you wanna self custody, you can self custody, otherwise you have, you have these. So I'm not the sort of purist personally that wants everyone to just follow one path. So I, I, I welcome this, this new option. But I just, I just want to. Sam, I just want to ask you about the price actions that we are, that we are witnessing. Are you surprised because a lot of people were wondering whether this event was going to be a buy the rumor, sell the new sort of event. Has it turned out that way or not? What do you think?

Well, in the immediate aftermath right now it's been pretty flat. I mean yesterday we saw some positive movement momentarily before things really went downhill in a hurry. It seems like perhaps the market has priced in, at least for now, a big portion of the approval. I know that the Bloomberg analysts have been saying for months now that, or weeks at least that there's about a 90 approval chance. So perhaps we are priced in for now. But it seems like money is now starting to flow into Ethereum which is a bit of a, if you're looking at from the outside, you're saying, well they approved a Bitcoin spot etf. Now Ethereum is going up. How does that, how do you square that circle? I think Ethereum, if I were to guess, is probably now going to start taking, taking shape in terms of price action. We've seen Bitcoin lead the rally, a lot of other altcoins as well. But I think now perhaps Ethereum is going to start rallying on expectations or on news that an Ether spot ETF could be approved. And I think perhaps by the end of this first quarter you're going to start to see a lot more dialogue, a lot more speculation about an ETH etf. So perhaps investors are already looking onto the next shiny thing, at least for the, for the, for the short term. I know you were talking about the bitcoin having earlier the next major catalyst for Bitcoin. As far as I see it, we could see a catalyst earlier if we see massive inflows into Bitcoin funds into the Bitcoin ETFs. But the Bitcoin having, you know, when you cut Bitcoin's inflation rate in half, even if demand stays constant, you give it, you know, four to six Months and price will start catching up. So for me, I still see 2024 as being a very strong year for bitcoin. The next major catalyst we could see in terms of inflows followed by the actual bitcoin halving. But the bitcoin having impulse doesn't happen right away. You have to wait a few months before price starts to take off. So that's. That would be my educated guess, having been through a few cycles so far.

All right, it seems that we have another guest on Ray, our market expert. How are you doing today?

Great. Good to see you. Congratulations everyone. If you're congratulating an etf.

Yeah, congratulations guys. It's been a huge success, I think. Yeah, I think Robert had a question for you guys.

Yeah, I'll put it to Ray as you've just got here, but it's not a light question. So I'm not giving you a softball to start, but one of the, one of the things that bothered me throughout this ETF process is how many of the issuers are using Coinbase as their custodian? Do you see that as a potential problem or is that, are they just the best solution right now?

I don't really have a strong opinion on that. That seemed to be between the sec, the applicants and Coinbase itself wanting to know where the assets are custody. So I don't really have a strong opinion on that. If you think about the other custody solutions that exist, some of them have been flawed and we've seen how flawed they were over the last year or two years that they use like rehypothecation strategies to trade with customers money, that they themselves struggle to secure customer assets, that they sometimes steal customer assets outright. And Coinbase doesn't have a track history of doing that since day one. So it does seem like one of the better options that exist at the moment.

Yeah, that makes sense.

I mean, to add to that, I don't see why Fidelity has been in the bitcoin game for a long time and have their own custody solutions. So I'm not entirely sure why they're not able to, you know, take on custody of what will be future client bitcoin. I'm not sure why that's the case. Maybe that'll change over time. Maybe Gensler will resign and we'll get a SEC chair who's a little bit more sensible and actually wants to work with financial institutions and then maybe we'll start to see some changes.

Yeah, I just have a follow up question on the Coinbase issue. We know that the Coinbase stock was often used as a proxy for Bitcoin. Right now I just wonder what's the effect of the approval of a spot Bitcoin ETF on the stock price of Coinbase? What's your outlook on these guys? Any of you who have an opinion about it, Sam or Ray?

I think it's a positive. Coinbase has a multi tiered revenue model. So, you know, they have their developmental chain base, they have the trading platform, they've got futures trading and derivatives overseas now they've got a footprint in multiple countries across the globe. They benefit from, you know, crypto trading on site. And now I assume they make money from custodying ETF Bitcoin also. So I think it's a positive. That Stock did a 400% move over the last 12 months, which I think is incredible. It's still trading underneath its IPO price. But I think their revenue model, and in the kind of absence of FTX and the absence of finance, both losing market share and Coinbase being there to absorb that market share, I think that they have a good fundamental case for, you know, the stock price to go up over time. Of course, that's, that's not financial advice, but it seems like a strong, fundamentally sound business. They did well during the bull market, so one can assume that they'll do well during this bull market. Now also, if you believe we're in a bull market.

Yeah, we've talked before about crypto proxy stocks. This is, I wouldn't even say it's a pro. It's a direct exposure to the crypto market in a, in a different sense. And Ray mentioned the 400% gains that we've seen over the year. A lot of that actually began, I believe in October, late October, as soon as around the time that crypto began, began to take off. If you take a look at Bitcoin's price since the fall, it's skyrocketed and I think Coinbase stock has, has virtually doubled since, since Halloween. So if we're into a bull market, which I think we are, I think Coinbase will probably do well. I know that it does. It has its run ins with the sec, but, you know, really, who hasn't at this point? It maintains a license, I think, in every US State and it's, it's well regulated. So I don't see any, any downside for Coinbase in that regard.

Do you think? I guess it's probably quite hard to answer, but Coinbase has made a lot of its money from fees on the exchange. I Know, Nate Guachi was saying that because the ETF is going to have, the ETFs are going to have such low fees that it could be a bit of a bloodbath for the exchanges. Do you think overall, perhaps Coinbase still comes out ahead?

Well, I don't have any particular feeling one way or another about it. I think that Coinbase has established itself as a, has a really strong position in the market anyway. And if, if all these different issuers are going to be using Coinbase, I think that it'll be fine. Now it depends on how long these, these fees are going to be low for. I mean, it could be just a way to take market share. I mean, I know that BlackRock has been pretty aggressive in their fee structure. I do expect perhaps fees to eventually go back up following the initial launches. But right now competition is going to be really, really fierce. So I think a lot of the issuers just want to get as much assets under management as possible and then establish themselves as a leader in the market and then perhaps we can see fees rise after that.

Right. And I actually have a follow up question on that because in terms of competition, I was listening to Eric Balchunas from Bloomberg who was saying that basically he would bet on BlackRock to be the leader in the competition in the sense that according to him there is going to be just one main leader that will absorb most of the liquidity and that will be according to him, if he had to bet on one, would be blackrock. Among all those that received the green light today. What's your take on that? Do you share the same view on this?

Since they're a heavyweight in terms of assets under management, I'm not exactly sure what the figure is, but it's in the trillions. So they're the most influential money manager on the globe. Behind that, I think that Fidelity also stands a good chance to also be successful with their ETF. I think these names, both BlackRock and Fidelity, have name recognition. People trust them. They're already knowingly or unknowingly invested with them via their pensions, 401ks and whatnot. So that makes perfect sense to me that the biggest boy in the room would continue to thrive.

Yeah, I agree.

I mean, if you take a look at Blackrock's approval record for ETFs, it's absolutely insane. So for me, the fact that they put their name in the hat, you know, several months ago, led me to believe that we're probably closer to an approval than not. Given the fact that their track record is so strong. But if you're betting on one horse coming out on top, I, I don't see how you can complain about BlackRock being it. It's stands a good chance. But then again we'll let the market decide. But that's where the fee wards are going to be coming into play.

Do you guys think that what sort of advantage does grayscale have by converting the grayscale bitcoin trust, Obviously people are talking about. I think it was Eric Balconas who said they're bringing a volume gun to a knife fight. What do you make of that? I'll put that to Ray first.

From what I understand, grayscales fee is higher than the other 10 ETFs that were approved and trying to give an answer that's not biased. I don't have a fantastic opinion of grayscale, so that's a tough one. What was the question again? I need to look through my bias.

So they do have the highest, they have the highest fee by a long, long margin. They've got a 1.5% fee this morning. It's changing constantly. People are lowering their fees. But grayscale hadn't yet. But Eric Balconess of Bloomberg said that they, because of the volume they are bringing with them, they, you know, essentially gives them an advantage. And I know that there were people calling for them to not be able to bring all of it across straight away and then that would bring out lawsuits and so on. So I wonder realistically what sort of advantage this gives them or whether, as we've been saying, BlackRock are just going to dominate as they are known to do.

Okay, thank you for clarifying that. Let's see how it plays out. Remember last week or earlier this week there was this rumor that BlackRock had already arranged, had sidelined capital, had people that were interested to the extent of $2 billion ready to go into the ETF. Right. That's quite a bit of money if that's true. So let's see over the next month or two or this quarter, what inflows are into all of these ETFs and how sustained, sustainable they are. Grayscale today has said that their management fee is higher because they're crypto literate, they're crypto native. They have, they bring the most knowledge into the marketplace and are already trusted by customers. But what people were doing in the past with grayscale was a cash and carry trade where they would deposit their BTC and lock it up for six months or a year and get GBT see shares in it in exchange, which we're trading at a premium. So it was a good cash and carry trade. It was a good way to be spot long on Bitcoin, but to also arbitrage, you know, the difference between GBTC share price and Bitcoin price itself with the ETF converting into shares. I don't know if that's the case anymore. There might be other places in the market where you can go do the exact same trade but with lower administrative or management fee. So I think this is a case of let's just kind of see how does the market react, where do they select to put their money, how consistent are inflows into these ETFs, so on and so forth.

Right. And now I just, I just want to go back a little on the Ethereum on the spot Ethereum etf. So basically there is a lot of hope, I see a lot of hope that following the approval of a spot Bitcoin etf, we're going to see soon this spot Ethereum etf. And that seems to be sort of, that optimism seems to be grounded in the fact that the SEC has explicitly made a difference between Ethereum and Bitcoin from all the rest, like basically saying that Ethereum is also not a security. It seems to, it seems to have recognized that Ethereum is not a security and therefore in a way similar to Bitcoin. So my question to you guys is what's missing in Ethereum still now to get the same level of, of acceptance that will, that will enable the approval of a spot Ethereum ETF at this.

Point, Sam, I'm going to let you jump on, but I just want to jokingly say what's missing is BlackRock just not pushing for a spot eth ETF right now. Once they do that, we'll have it. So that's a joke, but also kind of serious. But go ahead, Sam.

Another joke is that maybe what's missing is a court order to tell the SEC to actually, you know, do, do your do your job properly and stop advocating whatever the hell you're advocating over there. Because things really changed after the grayscale ruling over the summer. So if you take a look at what Eric Baltuna said, I think he more or less said that an Ether spot ETF is, will probably be fine and we're going to see approval sometime this year. It seems like the path has been laid because as you mentioned, the SEC has differentiated Bitcoin and Ether from the rest. So based on that not knowing, you know, what else is going on at the sec? I would say there is a path for approval and probably going to come this year.

All right, Ray, anything else to add on the Ethereum side of things?

I think it's coming. And as Sam spoke about earlier today, you see traders attention shifting toward Ethereum and Ethereum liquid stake derivative tokens. The whole narrative is now, you know, Spot ETF is coming. I'm sure we'll hear more dialogue about that. The minute the SEC erroneously tweeted out that yesterday that the ETF was approved, we saw volumes into Ethereum spike. Price hit a 12 month high today. It's still showing strength more than, than the bit than Bitcoin is right now. Bitcoin's looking like a, like a buy the room or sell the news event right now. So yeah, I think the spotlight is going to turn toward Ethereum and Solana. There's even rumors of a ripple, Spot ETF and other ones. So that's where everyone's going to go. At least, at least people who are, you know, traders, market makers, intraday traders, that sort of thing, they're just going to follow the trend or the narrative and I think that's where you'll see the flow go. But at the same time, obviously a kind of metric to keep an eye on is inflows into the Spot Bitcoin etf.

Yeah, I mean that's, that's a pretty watershed moment for me because it seems that since the time I got into the spot space, I've been hearing about this imminent, imminent adoption from institutions and it seemed like this sort of meme that was never coming, never coming. But I think this is the point where this is a really happening and it's not a meme anymore. Like we're gonna see for real now this capital getting into the market.

Yeah, let's see. I've been hearing this for seven years, been a seven year journey of daily hearing this. Like, you know, I remember in like 2016, 2017, I thought that this was gonna happen. I thought that it would happen in 2018 or 2019. So the fact that we're here now, it's, it's pleasant, you know, we should celebrate and be happy. Of course there's kind of the bittersweet element of what does mass adoption really mean for people who are more interested in the kind of like ideological and decentralized side of what Bitcoin represents. But it's still a momentous day.

Yeah. And I think this is a great moment actually for people that just joined our live Stream to just quickly sum up the key events of this saga, the SPOT Bitcoin ETF saga. So maybe one of you, Ray or Sam, could you just briefly go through the key, the key points that brought us here at this point, at the approval, maybe. Sam, do you, do you, do you feel like guiding us through the key events?

Sure. I mean it's all been pretty jumbled for me now. It's all been like one, one stream. I mean obviously filers have been filing now for years to get a spot Bitcoin etc ETF approved. We saw futures products approved back in 2017, a futures ETF in 2021 and then you started seeing more of the big heavy hitters come into play with blackrock this summer. This year we got that grayscale ruling earlier in the, in the summer, I believe. That said, basically the SEC kind of overstepped its bounds and just denying grayscale's application. And since that ruling, things seem to have changed. So over the past few months we've seen filings and refilings and amendments and meetings and closed door meetings and this and that ultimately leading to this particular deadline because the SEC has deadlines in which it has to either call for review or actually make a decision. So we've known about this deadline, January 10th now for, for quite a while and over the weeks and months we've got growing indication that the SEC is getting its ducks in a row and was about to approve all of them at once, which I think is the right, is the right thing to do. You can't pick winners, winners and losers with such high stakes. So we saw that back and forth and as we saw, basically it was a done deal this week. We just had to wait when, when the mic was going to drop. And it happened today. It happened a little bit earlier than we thought today. But that's kind of for me, just the general background of the events that led us to where we are today with the ETS finally being approved.

Ray, is there anything missing in the reconstruction that Sam just made of the key events? Any other specific points that you want to highlight?

That was fantastic. And you know, I thought it would be a boring type thing where we got a generic letter from the sequel SEC in the late hours of the night and the ETF was approved and all the kind of celebration would happen via our crypto, Twitter or ex social influencers. Right. But I think what was funny is that Gary Gensler has for years been the pot that's been calling the kettle black and constantly rubbing egg in our faces. And then yesterday, somehow his account or their account is hacked and they erroneously tweet that, that the ETFs are approved. And it does a market move. You know, it impacts the market in a positive and in a negative way, in the same way that our beloved Cointelegraph intern did a few months back. So I think, you know, what's funny about that is it's just crypto. We got a crypto end to this ETF approval. It was, there's memes, there's hilarity, there's shenanigans, there's unexpected twists and turns. And you would think that as an asset becomes kind of more institutionalized, that it would get boring and that the volatility would start to go away and it become. Would start to look more corporate. But I think what yesterday showed us is there's still. There's still a lot of. A lot of jokes and hilarity and entertainment to come with this spot bitcoin etf. So. And can I add another thing that I think is great is like, we've come so far. So Sam and I watched all the institutional investors get their fingers burnt off in the last bull market where they thought that just pummeling liquidity and trying to take market share in these defi protocols and then large cap cryptocurrencies would allow them to kind of co op the revolution that cryptocurrency represents. And they got blown up to the same extent, if not worse than retail investors. So here we are now with this, with this spot etf, and I'm just curious to see how successful it is, what happens over the long term. And I think that crypto as an industry has enough space for everyone to play. There's enough room for everyone to grow and to basically get a piece of this pie. So welcome institutions.

Yeah, actually, I want to show a screen, to show our audience the actual document that proceeds. Can you see my screen, guys?

Yeah.

Right. So this is actually the. The actual document that testifies the approval of the spot Bitcoin etf. It was on the website of the US Sec before for summary. For some reason it was taken down and that was what. What was on the website later. So that was pretty puzzling. And we were all trying to figure out what happened here. But yeah, as you said, Ray, this is all part of the crypto sort of fun side of these things.

So.

Yeah, it's been pretty wild. But just going back to the price of bitcoin, I wanna just throw in there one more thing, by the way. Can you still see my screen guys? Or it's gone. Oh no, it should be fine now. No. So yeah, I just wanna, I just wanna bring up price prediction by Tom Lee who was interviewed, he was interviewed not long ago in a news in, in a TV broadcast about the ETF and the impact on the price. And he was saying that he expects in one year Bitcoin to reach around 100, $150,000 as like a potential benchmark for like the next year or so. And then in a five years time frame he sees bitcoin reaching potentially half a million price because of the involvement of all this institutional capital. Do you see these predictions as something realistic?

You see me taking a deep breath. That guy's a broken record. And you know like a clock is right twice, two times per day. And ever since I got into crypto I've heard Tom Lee say that bitcoin's going to 120, 150 or 500, him and all those other guys. And maybe this time it will and you know, he can self congratulate and we can all be happy because we're super rich now. So with the having coming up, I do personally feel like six figure bitcoin was on the cards irregardless of there being a spot Bitcoin etf, whether it was approved or denied, that seemed to, you know, a lot of data suggested that seems to be where bitcoin has intention to go. Right. Also with the Federal Reserve kind of reaching the end of their interest rate hiking regime and we're expecting cuts or at least market participants and you know, calorie shell readers are expecting two or three interest rate cuts in 2024 and a return to easing. Given that the Fed or the US hasn't really addressed its larger debt problem. We know that easing monetary money printing or just people's belief that the government is incompetent when it comes to like managing money and planning for the future has been kind of a tailwind for bitcoin price and for risk assets. So Regardless of this ETF being approved, I personally believe that 100k plus was on the cards already for bitcoin, especially given that it's a having year. Especially given the growth of the bitcoin mining sector or industry and the global involvement that we see and the growth that we see in the bitcoin mining space. So in addition to that, Bitcoin's utility in places that kind of struggle with hyperinflation or capital control, so on and so forth, like it's an attractive Asset in many different ways to many different people in different walks of life. So I felt six figures was on the card anyway and an ETF should just help with us getting there. So perhaps this time or next year Tom Lee will be right.

Pardon my skill actually. Yeah, and actually I agree with you Ray, that's the six figure benchmark is definitely on the card. I also have this feeling and yeah, I think that usually every bull market we see less. We see bitcoin appreciating less than the previous one. But as someone told me not long ago, basically this time we have this, with this event, the approval of the spot Bitcoin etf, which potentially can be this sort of factor that invalidates that trend of bitcoin appreciating less and less every cycle. But who knows? Yeah, it's, it's difficult to predict. Sam, do you want to give us your opinion about the price prediction that we were discussing?

Yeah, I stopped listening to Tom Lee in 2017. I mean he got wrecked pretty badly there with his, his takes. So yeah, I think, you know, bitcoin, I've always kind of speculated that this could be perhaps the last four year cycle in terms of price spiking the way it does because bitcoin's inflation rate is already so low. I just wonder how many, how many more massive spikes in price can we see because of the having moving forward when we have an inflation rate that's so low. But for me, I've always said that 2024 was going to be a big year. I think six figures is probably a reasonable target. We hit 69,000 last cycle. There's a lot of shenanigans that went on last cycle. I think that it was a pretty much textbook four year cycle. We didn't have a blow off top. I think we had a lot of. We might want to revisit that cycle sometime down the road and really discuss, you know, what the hell happened then. But yeah, with, with inflows coming into ETFs with demand rising, it seems like among institutions and retail, I do think that the price is going to go up. How much higher? I don't know. Six figures is a good benchmark and I think we'll probably see the broader market follow suit. So I'm expecting all time highs for other digital assets as well and perhaps new projects we haven't heard of yet. So overall I think that 2024 is going to be a good year from a price perspective.

Right. Yeah, I think that that's a great note to sort of Approaching the, the wrap up of the, of this discussion. Guys, it's been quite a while. The couple of days we saw this event, this historical event happening today. We were waiting it for a very long time. Do you have any, any other thoughts to share with our audience? Something that they should know about what just happened?

I think price in the short term is not that important and people should not be too concerned with what bitcoin price does over the next month. If your belief is that this spot Bitcoin ETF is the vehicle that's going to take price to six figures or to 200, 300, 500K. Some people think $10 million per coin if that, if you subscribe to, you know, those price estimates, then patience is the thing that you need to have. So over the short term, did I want to see bitcoin on the approval go to 50,000 or 53,000 or 55,000 or 60? Sure. I would have loved to have seen that. We all would have made money, those of us that are trading. But that's not what happened. But I'm not dismayed. So I think this is a phenomenal step forward for bitcoin adoption for bitcoins, kind of validation within the more traditional halls of finance that this is a real asset that trades in real markets, not on Ponzi exchanges in the Bahamas anymore. And it's not something that's used, as Jamie Dimon says, for sex trafficking, drug smuggling and whatever else he seems to think that Bitcoin's used for is wrong. We've proven that here at Cointelegraphy, like ever since I've been here five years in a row, we write articles that kind of disprove that, you know, bitcoin's not used for any of that, of that stuff. But in the short term, prices are relevant. Over the longer term, you know, six months to a year, I think that's where people should be kind of putting their, their focus on where prices might go, especially with the halving coming up. And let's see what happens after that.

Yeah.

Yeah. On the topic of Jamie diamond, for those who aren't familiar, he heads JP Morgan and he's been talking about Bitcoin being no intrinsic value, being a tool for money laundering. Well, JP Morgan is an authorized participant for BlackRock's Spot Bitcoin ETF. So don't listen to what they say, look at what they do. You know, JP Morgan has been in the blockchain space now, behind the scenes for several years. Yeah, I mean, don't, don't look at what they say, look at what they do.

Yeah, that Jamie diamond story was was pretty, was pretty funny because yeah, basically talking, talking bad stuff about bitcoin all the time but then participating in the, in the spot Bitcoin ETF as we said as an authorized, as an authorized participant. So yeah, I think that we are witnessing a huge change in the image of bitcoin and how it is perceived. So yeah, very excited to see what it's going to be the impact of this in the long run. The event that we witnessed today is just the beginning. So now we are going to see the actual effects and that's the fun part. The fun part is starting just now. So yeah, I think this is a great note to wrap up the discussion guys. Thanks a lot for joining our show today and sharing all those great insights.

Thanks guys.

Yeah, thanks. Thanks for having me.

Yeah. And.