Bitcoin ETFs: 2024 Bull Run or Collapse on the Horizon?

As you may already know, Bitcoin ETFs have been making the headlines for quite some time now, generating different reactions within the markets.
 

Some are betting on this product, emphasising how important it would be for the future of finance – specifically arguing that a gap between Traditional Finance (TradFi) and Decentralised Finance (DeFi) is what’s needed for shaping the industry.
 

Meanwhile, other opinions have expressed concerns about the potential drawbacks associated with these ETFs, explaining that it is not what we think it is.

As the markets are getting ready for the new year, the main question now remains –
 

Will BTC ETFs ignite a 2024 bull run or trigger a collapse in the markets?

The Anti-ETF Chorus Gets Louder

Bitcoin’s 2024 performance heavily depends on a variety of potential bullish and bearish catalysts.

Numerous factors can influence the price of Bitcoin in the new year, including but not limited to:

• Institutional Adoption
• Halving
• Regulatory Changes
• Macroeconomic Trends

… and more.

Trading Sardines… 🐟

Chief Investing Officer of Second Foundation, Ben Hunt, has publicly voiced his concerns across the X platform (formerly Twitter) regarding the approval of Bitcoin’s spot ETFs.

 

Source: X (Twitter)

Hunt has always been known for his critical stance on cryptocurrency, and recently labelled Bitcoin as a “trading sardine” by highlighting its speculative nature rather than a stable investment.

 

Additionally, Hunt argues that these ETFs lack the anonymity that was originally intended for Bitcoin. By placing control in the hands of institutional investment firms, he believes that the initial essence of the coin will be lost.

Warning of Bitcoin’s Potential Demise

Hunt’s sentiments echo warnings from other influential figures in the crypto community.
 

Arthur Hayes – a prominent crypto personality – painted a grim picture of Bitcoin becoming a pawn in the hands of major asset managers.
 

Hayes in his new blog on December 23rd red flags potential efforts by traditional finance firms to kill Bitcoin.
 

Wall Street giants will only serve to “vacuum up” Bitcoin and store it in a “metaphorical vault”; if too successful, the number of Bitcoin transactions would dry up, says the BitMEX co-founder.
 

Hayes argues that companies like BlackRock vacuum up assets, store them in a metaphorical vault, issue a tradable security, and charge a management fee for their ‘hard’ work.

Explained in simple English, large finance institutions holding BTC through ETFs might not actively use the cryptocurrency, leading to a lack of transactions – which will potentially lead miners to shut down their mining operations.
 

Never Back Down… Never Give Up?

As the approval date for spot Bitcoin ETFs approaches (Gensler, we’re closely watching you 👀), the cryptocurrency market is rife with both hope and apprehension despite all the negative comments and sentiment across different platforms and analysts.
 

• The SEC’s approval for the world’s first Bitcoin ETFs could be looked back upon as the starter klaxon for more institutional adoption of cryptocurrency, helping to see more inflows into the market in a structured manner.
  
   
• The arrival of a spot Bitcoin ETF to Wall Street could eventually open the door to brand new investment opportunities, like short-selling which can help institutions to trade cryptocurrencies faster.
   

While some anticipate a bull run, others (like both Hunt and Hayes) warn of the potential challenges and risks that lie ahead.
 

Every new project will generate doubts and fears in the markets, and while being sceptical about BTC ETFs is expected, completely shutting the door on such a product is definitely seen as a setback.

The impact of these ETFs on Bitcoin’s future remains unknown, and market participants will be closely keeping an eye out on the events unfolding in the coming year.