Representations of cryptocurrency Bitcoin are placed on a PC motherboard in this illustration taken June 16, 2023.
Dado Ruvic | Reuters
The false news was enough to send bitcoin spiking briefly before falling. It also ruined the celebrations of the crypto industry players in St. Moritz, many of who have been waiting for years for a bitcoin ETF to get past skeptics at the SEC.
“We walked into the lobby bar, right as the tweet came out, and everyone was ecstatic … and then five minutes later after all the drinks were ordered … very sad,” Meltem Demirors, head of strategy at CoinShares, told CNBC on Wednesday.
“But, look, I think if you’re a screenwriter, you couldn’t write the narrative of this industry, it’s wild, its preposterous, its crazy.”
The false post has not dampened the mood among crypto bulls, who say that new bitcoin highs are possible this year.
“I think we are going over six figures by the end of the year,” Demirors said, highlighting two key reasons — a bitcoin ETF approval and the so-called upcoming “halving” event.
Both of these factors underpinned the more than 150% rally in bitcoin of last year — a rise that has continued into 2024.
Many are excited about a bitcoin ETF, which tracks the price of the cryptocurrency and allows market participants to invest in bitcoin without actually owning the crypto.
The thought is that an ETF could bring in larger and more traditional investors, who didn’t want to go near cryptocurrency.
“This is a watershed moment, no question about it. It’s going to usher in a lot of institutional capital, it’s going to change the dynamic of this asset class completely,” Sheila Warren, CEO of the Crypto Council for Innovation, told CNBC on Wednesday.
Crypto execs are not expecting that the SEC social media debacle will fully derail the ETF approval.
Fred Thiel, CEO of bitcoin miner Marathon Digital Holdings, told CNBC that the SEC may “delay” approval, but will likely give the green light soon.
“I have a feeling that they’re likely going to approve a whole slew of them and then move on,” Thiel said.
Demirors of CoinShares said that the ETFs could potentially see capital inflows of $25 billion to $100 billion in their first year of trade, coming from various areas, including the trillions of dollars in U.S. retirement funds.
The previous all-time high of bitcoin was logged just under $69,000 in November 2021.
The bitcoin price collapsed in 2022, as projects failed, bankruptcies flooded the industry and major players such as the crypto exchange and FTX faced criminal probes in the U.S.
Bitcoin then rose by more than 150% in 2023, with much of that increase owed to excitement around the ETF.
But bitcoin also has historically traded in cycles, which include key events called halvings — when the rewards that miners earn from mining bitcoin are slashed in half. This reduces the amount of bitcoin supply in the market and has often preceded a bull run to all-time highs. There will only ever be 21 million bitcoins in circulation.
The next halving is due to take place in April 2024.
The anticipation over ETF and the halving has caused the crypto industry to get very bullish on bitcoin this year.
“I think bitcoin will either follow its historical cycle, which would have it increase in price, achieve the prior all-time high some time toward the end of this year, then new all-time highs towards the end of next year. That’s if it follows historical patterns,” Thiel said.
Thiel added that potential monetary policy easing from central banks globally could also help support the price of bitcoin.
“We estimate internally that we’ll definitely hit the all-time high levels by the end of this year, the prior all-time highs, and we’ll see into next year what happens beyond that,” Thiel said.
CNBC previously spoke to people, both inside and outside of the cryptocurrency industry, about their price outlook, with calls ranging from $60,000 to $500,000 for bitcoin by the end of 2024.
