Discover the turning point: 2023 could be the year that revolutionizes the crypto market. Mike Novogratz, leading financial institutions and a surprising report reveal why the green light for spot Bitcoin ETFs could not only be a game-changer, but also grow the market by mind-boggling amounts. Don’t miss the most important details now!
Mike Novogratz hints at Bitcoin ETF approval for 2023
In an interview with SquawkBox, Novogratz hinted that the SEC could potentially approve a spot Bitcoin ETF by the end of the year.
This assessment came after the SEC’s recent decision, a Not to challenge court decision in connection with Grayscale.
Novogratz criticizes the SEC’s contradictory approach, which paves the way for Futures ETFs paved the way, but spot ETFs were put on hold.
The CEO believes that the SEC is under pressure to act rationally, particularly given public pressure from major market players such as BlackRock, Fidelity and even Grayscale itself.
While Novogratz’s statements point to a possible change in course in the regulatory landscape, one should view them in the context of one’s own interests.
However, public filings and comments show increasing positivity regarding Bitcoin ETFs, indicating a fundamental change in the SEC’s thinking.
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How Approval of Spot Bitcoin ETFs Could Grow the Crypto Market by $1 Trillion
CryptoQuanta blockchain data analytics company, recently launched one Report published. This suggests a massive influx of capital into the crypto market if the US Securities and Exchange Commission (SEC) gives the green light to spot Bitcoin ETFs.
Several major financial institutions such as BlackRock, Fidelity and VanEck have already submitted applications for such ETFs. Approval could possibly come by March 2024 at the latest.
Given the current total assets under management (AUM) of these companies is around $15.6 trillion Even a 1% allocation to these ETFs would pump this enormous amount into the crypto market. That’s almost a third of Bitcoin’s current market capitalization.
Another interesting point is that this expected capital inflow would exceed the funds that flowed into the Grayscale Bitcoin Trust (GBTC) during the last bull market. GBTC is currently the world’s largest cryptocurrency fund, managing assets worth $16.7 billion.
CryptoQuant adds that historically the Bitcoin market cap grows 3 to 5 times faster than realized capitalization in bull markets.
This would mean that for every additional dollar flowing into the Bitcoin market, the market cap could potentially increase by 3x to 5x.
As It was recently incorrectly reported that a spot Bitcoin ETF had been approved, the Bitcoin price briefly jumped to $30,000. This suggests market dynamics characterized by optimism and anticipation for actual regulatory approval.
With a current total market capital of approximately $1.13 trillion, the crypto market could to grow by another trillion dollars through the approval of spot Bitcoin ETFs.
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Why drivechains could revolutionize Bitcoin
According to Bitfinex CTO Paolo Ardoino, Drivechain’s technology could be a real game-changer not only enables faster block times, but also improves privacy and enables more complex smart contract functions.
This claim comes at a time when the issue Drive chains and the BIP 300 proposalfirst formulated in 2017 by Paul Sztorc, CEO of Layer 2 Labs, is gaining importance again.
Drivechains are native, merge-mined sidechain mechanisms for Bitcoin, but would require a controversial fork.
This technology could enable users to their Lock Bitcoin securely via a decentralized two-way peg and create coins with propertieswhich are similar to those of various altcoins.
They could also offer additional fees to miners, increasing Bitcoin’s hashrate and security, while introducing features such as DeFi, NFTs, security tokens, and Bitcoin-anchored stablecoins.
However, the introduction of drivechains is not without challenges. Ardoino warned that changes to the Bitcoin protocol could create potential vulnerabilities.
Unlike other sidechain solutions However, Drivechains rely on the mining power of Bitcointo secure the sidechain, using techniques like Merge mining and hashrate escrows as incentives.
The discussion about drivechains also sheds light on the so-called ossification of Bitcoin, which makes it difficult to introduce new features.
Ardoino emphasized that the ongoing debate about scaling solutions is actually beneficial for the further development of the technology. The future direction of Bitcoin’s scaling remains uncertain, but ongoing debates are driving innovation.
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Taproot Assets in Bitcoin’s Lightning Layer
When it comes to groundbreaking developments in the Bitcoin world, the introduction of Taproot assets on the Lightning Layer is certainly at the top of the list.
According to Lightning Labs promise Taproot Assetsthe Expanding opportunities for developers by creating a scalable, multi-asset network that stays true to Bitcoin’s core values.
Taproot assets are intended to be one enable a wide range of applications, from stablecoin issuance to complex transactions and smart contracts.
The key here is scalability: the question of how to handle increasing demand without clogging up the network is of paramount importance. This challenge was already evident with the issuance of BRC-20 tokens via the Ordinals protocol.
Taproot assets, for example, could offer a new level of privacy. Multiple transactions could be consolidated into a single transaction, making it more difficult to track activity.
At the same time, more complex ones could occur Multi-signature transactions introduced where multiple parties must agree to complete a transaction.
The positive aspects are many. From complex transactions that are only carried out under certain conditions, to lower transaction costs and improved security.
But there are also disadvantages. The Complexity of new features might be overwhelming for beginners and the increased privacy could raise regulatory concerns.
Likewise, the widespread adoption of Taproot Assets is not a given. Because Not all wallets and platforms support these new functions yetand it may take some time before they are generally available.
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Bitcoin price forecast
Most recently, Bitcoin was able to record an intraday price increase of almost 11% at times due to the false report of the confirmed Bitcoin ETF and the SEC’s waiver not to subject the Grayscale Bitcoin ETF to another review by the appeals court.
However, after the news caused a huge uproar and was withdrawn, Bitcoin was forced to give up around half of its gains and has barely moved since.
However, it could Still keep BTC at a higher levelwhich is probably also due to the news about Bitcoin’s further developments regarding Drivechains and Taproot assets.
Bitcoin is not yet oversold and can stay above the 23.6 Fibonacci level of this year’s uptrend. However, trading volume has decreased enormously since the initial increases. This points to one soon approaching eruption in one of the two directions there.
If the RSI were to form a deeper low within the next 1 to 2 days, a bearish divergence would occur, which tends to indicate a sell-off. The temporarily bearish order book is another indication that the sell-off will continue.
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About the author: Simon Feldhusen came into contact with the stock market for the first time 17 years ago and has been intensively involved in the topics of trading, cryptoassets, stocks, P2P, corporate finance, finance and entrepreneurship on a daily basis for more than 8 years. He has also been working as a copywriter and ghostwriter in the financial sector for several years. During this time he has acquired a diversified knowledge through various training courses on the financial markets and following daily news. Since then, not a day goes by without him dealing with the markets. He publishes, among others, for Finanz.net, ETF-Nachrichten.de, Coincierge.de and P2E News.com.