The price of bitcoin is headed to $150,000 by 2025, financial planning guru and entrepreneur Ric Edelman said during the “Are You Ready for a Bitcoin ETF?” webinar he hosted yesterday.
“Between the likelihood of an ETF and bitcoin halving in 2024 … I expect bitcoin to be in the neighborhood of $150,000 by the summer of 2025,” said Edelman, founder of the Digital Assets Council of Financial Professionals, which sponsored the webinar.
Edelman also said that while he recommends an allocation of approximately 1% to these digital assets, he himself is “overweight” in bitcoin.
“I love that answer, Ric. I’m down with that,” said Bitwise Asset Management’s chief investment officer, Matt Hougan, during the webinar. “I think we’re in a multiyear bull market. The previous all-time high is $68,000, so your prediction at $150,000 sounds reasonable to me.”
There’s an increasing buzz about the possibility of the first U.S. spot bitcoin ETF as regulators’ stance against the vehicle softens. For years, the U.S. Securities and Exchange Commission under Chairman Gary Gensler has rejected applications. But the pressure on the agency is mounting from a number of sources. Some lawmakers in Congress are clamoring for approval as institutional advisors in numerous countries, including Canada, already operate successful spot bitcoin ETFs. And now all eyes are on Gensler after BlackRock, the largest asset manager in the world, submitted an application for a spot bitcoin product. A group of Wall Street firms followed BlackRock’s lead, with ARK Invest and Bitwise amending their previous applications and Charles Schwab, Citadel Securities and Fidelity all submitting applications, Hougan said. Bitwise has had two applications rejected previously by the SEC, but the firm quickly resubmitted a third application following BlackRock’s application.
Advisors and investors are hopeful that institutional trading will drive the price of bitcoin substantially higher.
“My base case is we’re going to have a spot bitcoin ETF in the U.S. in the near future,” Hougan said. “They’re trading and trading well in Canada, Germany, Scandinavia, Brazil. I think it’s established you can have one, and I think we’ll get one here soon. Even if this current batch of applications didn’t get approval, I don’t think it would be a huge setback. Maybe some disappointment, a little bit of reset, but as long as it’s somewhat close ahead of us, I think that investors can wait for that impact.”
Edelman pondered what would happen to the price of bitcoin if Gensler says yes or no.
In terms of what will happen if a spot bitcoin ETF is approved, Hougan continued, “My honest expectation is that there is an opportunity when it launches. I think the long-term spot price impact is positive and significant. We expect there will be significant inflows into a spot bitcoin ETF over time. But if you look at the impact of novelty ETFs, it takes multiple years for them to fully get up to speed.”
“What are the odds that the SEC says yes to at least one spot bitcoin ETF?” Edelman asked.
“I think there are no guarantees,” said Hougan, “but we’re optimistic that we are in the final phase of getting a spot bitcoin ETF.”
“So better than 50%?” Edelman asked.
“Yes,” said Hougan. “What we said publicly is late Q4 or early Q1, just because that is when the calendar times out, but it could come at any point,”
Edelman said, “We know when BlackRock’s application was filed, bitcoin’s price rose 25% on the enthusiasm that it would bring a lot of new advisors and investor dollars into the marketplace, it would add hundreds of millions of dollars into the market and probably increase institutional activity as well. Since it’s a fixed supply, the increased money would cause the price to rise. That’s assuming the SEC says yes. And the market has already kind of adjusted for that since BlackRock’s application.”
Edelman asked Hougan whether it was better to invest in today’s vehicles, even if they are more cumbersome, or wait for the spot ETF.
“Every investor has to decide how much risk they want to take on,” Hougan said. “There is more risk in bitcoin before a spot ETF is approved than after, because after there will be more regulatory clarity. Some will want to take that risk, while others may want to wait.”
“This is a big reduction in risk if we get a spot bitcoin ETF in terms of bitcoin’s long-term trajectory, so you’d expect the return opportunity for those who are willing to bear it out before that.”
Edelman said that now is the time to start having conversations with clients—before the news breaks about the first ETF.
“You don’t want to wait until the news comes out, because it will be page one news when it hits and you’re going to get calls from clients asking about it and you’ll look flat-footed if you have the reaction, ‘Gee, I didn’t know this was coming.’
“There’s a good chance,” he added, “some of your clients own bitcoin today and you don’t even know it. This is a good opportunity to discuss how they can own bitcoin in a much more familiar package than they’re able to right now.”