Representations of the cryptocurrency Bitcoin are placed on a PC motherboard in this illustration taken on June 16, 2023.
Ruvik dice | Reuters
The fake news was enough to send Bitcoin rising briefly before falling. It also spoiled the celebrations for players in the St. Moritz cryptocurrency industry, many of whom had been waiting for years for a bitcoin exchange-traded fund to bypass SEC skeptics.
“We walked into the lobby bar, right after the tweet came out, and everyone was ecstatic…and five minutes later after ordering all the drinks…very sad,” said Meltem Demirors, head of strategy at CoinShares. CNBC on Wednesday.
“But, look, I think if you're a screenwriter, you can't write the story of this industry, it's so wild and preposterous and crazy.”
The false post has not dampened the mood among crypto bulls, who say new Bitcoin highs are possible this year.
“I think we crossed six figures by the end of the year,” Demirors said, highlighting two main reasons – the approval of a Bitcoin exchange-traded fund and the upcoming so-called “halving” event.
Each of these factors fueled Bitcoin's rise of more than 150% in the past year – a rise that will continue until 2024.
Many are excited about the Bitcoin ETF, which tracks the price of the cryptocurrency and allows market participants to invest in Bitcoin without actually owning the cryptocurrency.
The idea is that ETFs can attract larger, more traditional investors, who don't want to get close to cryptocurrencies.
“This is a watershed moment, there's no doubt about that,” Sheila Warren, CEO of the Cryptocurrency Innovation Council, told CNBC. “It's going to bring in a lot of institutional capital, and it's going to completely change the dynamic of this asset class.” Wednesday.
Cryptocurrency executives don't expect the SEC's social media debacle to completely derail ETF approval.
Fred Thiel, CEO of bitcoin mining company Marathon Digital Holdings, told CNBC that the SEC may “delay” approval, but will likely give the green light soon.
“I have a feeling they'll probably agree to a good number of them and then move on,” Thiel said.
Demirors of CoinShares said the ETFs will likely see capital inflows of between $25 billion to $100 billion in their first year of trading, coming from various areas, including trillions of dollars into U.S. pension funds.
The previous all-time high for Bitcoin was set at just under $69,000 in November 2021.
The price of Bitcoin collapsed in 2022, as projects failed, bankruptcies flooded the industry, and major players such as cryptocurrency exchanges and FTX faced criminal investigations in the United States.
Bitcoin then rose more than 150% in 2023, much of that increase due to excitement around the ETF.
But Bitcoin has also historically traded in cycles, which include key events called halvings — when the rewards miners earn from mining Bitcoin are cut in half. This reduces the amount of Bitcoin supply in the market and often precedes a rise to all-time highs. There will only be 21 million bitcoins in circulation.
The next halving is scheduled to take place in April 2024.
Anticipation over ETFs and the halving has made the cryptocurrency industry very bullish on Bitcoin this year.
“I think Bitcoin will follow its historical cycle, which will cause its price to increase, achieving its previous all-time high sometime toward the end of this year, and then all-time highs at the end of next year. 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 will definitely reach all-time highs by the end of this year, the previous all-time highs, and we will see next year what happens after that,” Thiel said.
CNBC previously spoke with people, both inside and outside the cryptocurrency industry, about their price predictions, with calls ranging from $60,000 to $500,000 for Bitcoin by the end of 2024.
