{"id":26657,"date":"2023-12-15T12:05:23","date_gmt":"2023-12-15T12:05:23","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/100000-btc-dont-undervalue-bitcoin-etf-influence-says-adam-back\/"},"modified":"2023-12-15T12:05:26","modified_gmt":"2023-12-15T12:05:26","slug":"100000-btc-dont-undervalue-bitcoin-etf-influence-says-adam-back","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/100000-btc-dont-undervalue-bitcoin-etf-influence-says-adam-back\/","title":{"rendered":"$100,000 BTC? Don\u2019t undervalue Bitcoin ETF influence, says Adam Back"},"content":{"rendered":"
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The COVID-19 pandemic, rampant inflation and regional conflicts directly influenced Bitcoin\u2019s (BTC) drop in value over the past two years. However, 2024 promises to be a resurgent period, according to Blockstream CEO Adam Back.<\/p>\n

The cryptographer, who pioneered the proof-of-work algorithm applied in Bitcoin’s protocol, tells Cointelegraph that the preeminent cryptocurrency is trailing below the historical price trend line of previous mining reward-halving events.<\/p>\n

\u201cBiblical\u201d events hurt Bitcoin<\/h3>\n

Back weighed in on the potential price action of Bitcoin as the next halving, which will see Bitcoin miners’ block reward reduced by 6.25 BTC to 3.125 BTC, looms in April 2024. Block rewards halvings are programmatically hardwired into Bitcoin\u2019s code, taking place after every 210,000 blocks are mined.<\/p>\n

Bitcoin’s supply issuance is hardwired into its protocol, with BTC mining rewards halving every 210,000 blocks. Source: bitcoinblockhalf.com<\/figcaption><\/figure>\n

Back says that the overlaid averages of the previous market cycles and halvings indicate that Bitcoin\u2019s relative value is trailing behind widely accepted projections. Multiple events have played a role in driving the price of BTC down, which has also been seen across conventional financial markets:<\/p>\n

\u201cThe last few years were like biblical pestilence and plague. There was COVID-19, quantitative easing, and wars affecting power prices. Inflation running up people, companies are going bankrupt.\u201d<\/p><\/blockquote>\n

The impact has keenly affected markets and portfolio management according to Back. Investment managers have had to manage risk and losses over the past few years which has necessitated the sale of more liquid assets. <\/p>\n

\u201cThey have to come up with cash and sometimes they’ll sell the good stuff because it\u2019s liquid and Bitcoin is super liquid. It used to happen with gold and I think that\u2019s a factor for Bitcoin in the last couple of years,\u201d Back explains.<\/p>\n

Bitcoin would have hit $100,000 already<\/h3>\n

As 2023 comes to a close, many of these macro events that Back cited have wound down while more industry-specific failures have also been resolved. This has been reflected in Bitcoin\u2019s recent price surge from Nov. 2023 onwards.<\/p>\n

\u201cThe wave of the contagion, the companies that went bankrupt because they were exposed to Three Arrows Capital, Celsius, BlockFi and FTX – that\u2019s mostly done. We don\u2019t think there are many more big surprises in store,\u201d Back said.<\/p>\n

Related: Blockstream targets continued Bitcoin miner surplus with Series 2 BASIC Note<\/em><\/strong><\/p>\n

The Blockstream CEO\u00a0predicted that Bitcoin would hit $100,000 in the following market cycle earlier this year and referred back to this point. He believes BTC would have hit this mark already if not for the factors highlighted in conversation with Cointelegraph.<\/p>\n

Back also referred to the\u00a0Bitcoin \u201cstock-to-flow\u201d model created by pseudonymous former institutional investor PlanB as a reference point for the potential upside for Bitcoin in 2024.<\/p>\n

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If you want to know more about bitcoin Stock-to-Flow:
* This is the original 2019 article:https:\/\/t.co\/n5P5uMCKHT
* Or watch this YouTube video:https:\/\/t.co\/3SGMU1Ln00 pic.twitter.com\/Qp8SjqtXIB<\/a><\/p>\n

\u2014 PlanB (@100trillionUSD) December 5, 2023<\/a><\/p><\/blockquote>\n

Back explains that PlanB\u2019s model and heuristics suggest that savvy Bitcoin investors historically bought BTC six months before a halving event and sold into significant surges in price that have occurred in the 18 months following the drop in mining rewards:<\/p>\n

\u201cPeople thought it was a bit of a crazy assertion that we might get to $100,000 pre-halving because I said it when the price was around $20,000.”<\/p><\/blockquote>\n

He adds that Bitcoin\u2019s price hitting $44,000 multiple times in Dec. 2023 suggests that his prior prediction might not be so far-fetched. <\/p>\n

The Bitcoin ETF effect<\/h3>\n

Prominent investors and market analysts have also highlighted the effect of the potential approval of several spot Bitcoin exchange-traded fund (ETFs) applications by the United States Securities and Exchange Commission (SEC).<\/p>\n

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People asking me if we changed odds. No, we still holding line at 90% odds of approval by Jan 10 (aka this cycle), the same odds we’ve had for months (before it was cool\/safe). What we watching for now: more amended\/final filings to roll in and clarity on in-kind vs cash creates https:\/\/t.co\/uiWgfxOfzz<\/p>\n

\u2014 Eric Balchunas (@EricBalchunas) November 29, 2023<\/a><\/p><\/blockquote>\n

Senior ETF analysts Eric Balchunas and James Seyffart have touted these applications to get the green light in early 2024. Galaxy\u00a0Digital\u2019s co-founder Michael Novogratz has also predicted mass inflows of institutional investment into the BTC-back products, a point which Back echoes:<\/p>\n

\u201cI think <\/strong>Bitcoin could get to $100,000 even before the ETF and before the halving. But I certainly think the ETF shouldn\u2019t be undervalued in its influence.”<\/p><\/blockquote>\n

A key reason cited by the Bitcoin advocate is that whole segments of traditional markets, including major fund managers like BlackRock and Fidelity, are simply not allowed to invest directly into assets like Bitcoin.<\/p>\n

Related: Bitcoin ETFs will drive institutional adoption in 2024 \u2014 Galaxy Digital\u2019s Mike Novogratz<\/em><\/strong><\/p>\n

\u201cIf they\u2019re managing a mutual fund they have rules, either externally imposed or as part of their fund, that they can only buy things like public stocks and ETFs. They can\u2019t buy into startups, they can\u2019t buy precious metals physically. They can\u2019t do any of that stuff,\u201d Back highlights.<\/p>\n

This remains a pertinent reason why a spot Bitcoin ETF could drive major capital inflows into the space. Back adds that the investment vehicle\u00a0opens access to Bitcoin exposure for many types of funds, particularly in the U.S.,\u00a0 that are more inclined to do so through Fidelity or BlackRock than with a cryptocurrency exchange.<\/p>\n

Magazine:\u00a0\u2018Elegant and ass-backward\u2019: Jameson Lopp\u2019s first impression of Bitcoin<\/em><\/strong><\/p>\n<\/div>\n