After some positive regulatory news, relative quiet on the legal front and a surge in token prices, investors and advisors may wonder if the thaw is here and a prolonged “crypto winter” may finally be over.
The man who founded Edelman Financial Engines, the largest U.S. RIA by assets under management, believes it is.
“The crypto winter is thawing fast, and soon we’re going to be in the crypto spring,” wrote Ric Edelman in a blog post earlier this year. “Bitcoin’s price is already almost doubled from its low, and many are predicting that it’s going to double again within the next several months.” Edelman, who stepped away from his role as chairman of Edelman Financial Engines a couple of years ago, has turned his attention to cryptocurrency and currently acts as CEO for the Digital Assets Council of Financial Professionals.
The crypto winter has been a long one, its beginning marked by bitcoin’s previous peak, the all-time high of $68,789.63 set on November 10, 2021. The price receded slowly until hitting a low of less than $16,000 in November 2022, a 76% decline from its high. Through that period, the crypto industry weathered several business failures linked to declines in investor interest and a few major scandals, including the collapse of crypto exchange FTX and the conviction of its founder and CEO, Sam Bankman-Fried, for fraud charges in the U.S.
Over recent months, however, there’s been a surge of optimism about the crypto universe, not in small part due to the recovery of token prices. Edelman’s argument, which he most recently made in an October blog called “Here’s Everything You Don’t Know About What’s Happening in Crypto,” is founded, in part, on faith that U.S. regulators will soon approve spot cryptocurrency ETFs, funds that will track the prices of major tokens like bitcoin and ethereum.
In August, Grayscale Investments, manager of the Grayscale Bitcoin Trust (GBTC), won litigation against the U.S. Securities and Exchange Commission, and a federal judge ordered the agency to give an up-or-down ruling to the company’s application for a spot-bitcoin ETF within a reasonable amount of time.
To people like Edelman, it’s now a foregone conclusion that Grayscale’s ETF will be approved at any time, as could nine other spot-bitcoin ETF proposals pending at the agency. Edelman went so far as to predict that bitcoin prices could climb to six-digit record highs by the end of 2024 if the products get the nod.
While observers wait (there was no word as of mid-November), in the meantime the SEC has approved ether futures ETFs, and a smattering of new products have joined the already available bitcoin futures ETFs on the market. The anticipation has extended to a spot ether ETF as well that would follow in the wake of the spot bitcoin product.
Edelman noted that the price of bitcoin has increased dramatically—having risen by 77% over the 12 months preceding his blog post; it had more than doubled in price over the 12 months ended November 11, from $16,778.10 to $37,086. Some think bitcoin may also have benefitted from the outbreak of war in the Middle East and what some see as its role as digital gold in an unstable world.
Edelman’s not alone in his enthusiasm. A week before his post, Morgan Stanley Wealth Management also weighed in, declaring that crypto winter was likely over. However, the bank offered different reasons in its October report, called “Will Crypto Spring Ever Come?”