Grayscale CEO Michael Sonnenshein has reaffirmed his increasing optimism regarding an upswing in cryptocurrency market investments following the potential approval of a spot Bitcoin (BTC) ETF by the Securities and Exchange Commission (SEC).
During a recent interview with CNBC, Sonnenshein highlighted the pivotal role of market optimism surrounding a prospective ETF approval in attracting institutional investors to the crypto space. He emphasized that a growing number of investors are incorporating BTC into their portfolios, and an SEC approval could significantly amplify this exposure, potentially unlocking a vast market worth up to $30 trillion in the United States.
“The approval will unlock the opportunity for a segment of the investment community that, unfortunately, has been previously excluded from participating and incorporating Bitcoin into their portfolios. We’re specifically referring to the advisory market here in the US, which currently represents around $30 trillion in advised wealth.”
In recent analyses, many experts have speculated on a potential surge in the price of Bitcoin and the initiation of a new financial cycle in the market following the introduction of an ETF. Notably, this anticipated surge is expected to drive inflows into Bitcoin institutional products, consequently elevating the Assets Under Management (AUM).
Industry leads remain bullish
On December 19, Michael Saylor of MicroStrategy expressed that the approval of a Bitcoin ETF would mark the most significant development on Wall Street in the last three decades. Saylor elaborated, emphasizing that an ETF would open a new avenue for investment, and he anticipates a substantial bull run for the asset class in 2024.
Saylor stated, “I don’t think we’ve ever seen a 2 to 10x increase in demand combined with a halving in supply in a scarce, desirable asset that people want to hold for a long period of time.”
Steven Schoenfield, CEO of MarketVector, foresees an additional $200 billion entering the market within a few months, while AllianceBernstein predicts a potential inflow of $650 billion into crypto assets under management if BlackRock’s application receives regulatory approval.
Micro and macroeconomic factors affect BTC price
Sonnenshein reflected on Bitcoin’s price appreciation since the beginning of the year, noting a remarkable 166% year-to-date (YTD) growth. Attributing this surge to both micro and economic factors, he highlighted investors turning to Bitcoin as a hedge against inflationary pressure, coupled with Grayscale’s recent legal victory against the SEC.
In 2023, BTC products have witnessed institutional inflows of $1.6 billion, experiencing an AUM of $36 billion. This uptick followed a slower start to the year, while the total cryptocurrency market’s AUM currently stands at $50.2 billion.
However, Senator Jamie Dimon criticized cryptocurrencies, asserting their sole use case is for money laundering by criminals and drug traffickers. In response, Sonnenshein maintained a bullish stance, stating that lawmakers and politicians may hold personal opinions on new technologies. Nonetheless, he emphasized that laws will play a crucial role in shaping the use of innovations like Bitcoin, ultimately granting investors access.
