Mark Yusko, the founder, CEO, and CIO of Morgan Creek Capital, recently shared his insights with Cointelegraph about the recently approved (by the U.S. SEC) spot Bitcoin ETFs and their potential impact on the cryptocurrency market.
Bitcoin ETFs and Market Dynamics
Yusko expressed a critical view of the approval of spot Bitcoin ETFs, suggesting that while they represent an important step for broader adoption, they are not without their challenges. He emphasized that the average investor, particularly from the Boomer generation, might not be technologically savvy enough to understand the significance of Bitcoin or the innovation of triple-entry accounting. Therefore, he sees the introduction of these ETFs as a necessary intermediate step for wider acceptance of Bitcoin. Yusko pointed out that companies like Coinbase and Kraken are valuable because they simplify the process for these investors.
Volatility and Bitcoin’s Growth
Addressing concerns that the spot Bitcoin ETF might reduce Bitcoin’s volatility, Yusko acknowledged that while volatility might decrease as the market matures, this is a natural progression. He drew parallels with Bitcoin’s early days, noting that its growth from a small, experimental project to a more established asset class naturally leads to reduced volatility. Yusko wore a shirt with the slogan “Embrace Volatility,” indicating his belief that volatility is an inherent and valuable aspect of Bitcoin’s journey.
Predictions for Bitcoin’s Price
Yusko reaffirmed his previous prediction about Bitcoin’s fair value and its potential price movement. He estimated that Bitcoin’s fair value is currently in the low $50,000s and expects it to approach this number by the time of the next halving. He anticipates that the fair value will need to adjust upwards post-halving to ensure miners remain profitable. Yusko predicts that the fair value could double following the halving, potentially leading to a price in the six-digit range in 2024. However, he expects less extreme price movements compared to previous cycles, due to reduced liquidity and leverage in the market.
Long-Term Outlook and Spot Ethereum ETFs
Regarding the long-term impact of the spot Bitcoin ETF and the possibility of a spot Ethereum ETF getting approved by the SEC, Yusko was cautious. He suggested that the approval process for an Ethereum ETF might not be as straightforward, given the SEC’s hesitancy and the evolving regulatory stance on Ethereum and other cryptocurrencies. Yusko estimated that the chances of a spot Ethereum ETF approval are less than 50%, emphasizing the need for firms managing these assets to work hard to make it happen.
Featured Image via Pixabay
