The chances of a mass approval of Bitcoin ETFs in January are thickening. This is the opinion of analyst James Sayffart.
Bitcoin ETF for January?
The consequent changes to Bitcoin ETF applications by Ark and 21Shares strongly suggest that constructive conversations are taking place with the SEC. In other words, it is no longer a question of whether the SEC will validate these ETFs, but when.
ETF documentation from Ark and 21Shares now contains more context and descriptions of risks for investors. Ark’s file was recently expanded with five pages of additional information.
For ETF expert James Sayffart, these conversations come when the green light is imminent…
“We believe the probability that Ark’s proposed ETF will be approved before January 10, 2024 is 90%”he declared a few weeks ago.
January 10 is the last deadline for the first ETF being the furthest in advance. This is that of Ark, the investment fund headed by Cathie Wood.
Here is the list of ETFs in the pipeline and the “deadlines” before which the SEC will have to decide:
-Ishare (BlackRock): January 15
-Bitwise: January 14
-VanEck: January 15
-WisdomTree: January 15
-Invesco: January 15
-Wise Origin (Fidelity): January 15
-Valkyrie: January 17
-Global X: February 19
-Hashdex: January 1
-Franklin: March 31
“Deadline” in quotes, because, frankly, the SEC could postpone everything again one last time. You will then have to wait until March, just before the halving…
For James Sayffart, the fact that the SEC has quickly postponed the Franklin Templeton fund file is perhaps a sign that it is preparing to validate all ETFs at the same time in January.
The ETF would be good news given that all of these funds collectively manage almost 20,000 billions of dollars. It would be enough for them to persuade their clients to invest 1% of their funds for bitcoin to easily hit $100,000.
The Bull Run of 2024
Whatever the SEC decides to do, other planets are aligning in favor of bitcoin.
The first good news came in September when the FASB (Financial Accounting Standards Board) updated its accounting rules to allow companies to report their bitcoins at fair value (“Fair value accounting”).
Currently, only the depreciation of bitcoins is recorded on company balance sheets. Capital losses appear in the balance sheet, but not capital gains! This accounting development is therefore crucial to encourage multinationals to invest their cash in bitcoins.
The new rule will come into effect in December 2024. The FASB agreed, however, that multinationals will have the opportunity to apply them earlier.
Furthermore, let’s not forget that the halving is fast approaching. In April, the number of bitcoins created every 10 minutes will increase to 3,125 BTC from 6.25 BTC over the previous four years.
Bitcoin will then officially be much rarer than gold. The most popular method for calculating this scarcity is called S2F (Stock to Flow).
This is the number of years it takes to double a stock (gold or bitcoin) based on its annual production. It is obtained by dividing the total existing quantity by the annual production.
This ratio is 60 for gold. It therefore takes 60 years to double the stock of gold at the current rate of extraction.
The bitcoin ratio is similar (59), but will increase to 119 next May. Gold and bitcoin will no longer be in the same category at all.
ETF, halving and accounting standards will be the three catalysts for the new highs that bitcoin could well mark next year.
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