DAIM Newsletter: Don’t Wait to Invest in Bitcoin
Cryptocurrencies have moved higher in 2023, a sharp reversal from 2022’s drop. That’s on par with the move higher in tech stocks and a rebound in assets in general.
However, there are some specific developments that may make the space look even more attractive in the year ahead. And within the crypto space, the likely big winner and first mover significantly higher will be bitcoin.
The most bullish catalyst has been the recent filings for bitcoin exchange-traded funds (ETFs) by companies such as BlackRock (BLK). While the SEC initially rejected their application, it was only the second time among the company’s previous 575 applications.
However, BlackRock is free to refile its application, once it adds in the counterparty information the SEC is looking for. Any ETF approval and launch will likely occur within 240 days, about the time before the next bitcoin halving.
An ETF would make it easy to invest in bitcoin. And it could allow for investors to place bitcoin into a tax-advantaged retirement account.
Meanwhile, the halving reduces the reward for mining bitcoin. Each four-year halving period tends to lead to a big move higher for prices. If an ETF is launched around the same time, there could be a combination of lower future supply meeting increased demand.
In short, there are multiple upside catalysts that could come into play in the next year. And with many downside catalysts such as exchange failures off the table, now could be the time to buy into crypto.