The year 2018 turned out not as expected by most crypto stake holders with the market mostly on a bear run.
Looking back, a few factors seemed to have shaped the market hence the BTC drop from its high of $20,000 to close the year at below $5,000. According to analysts & enthusiasts, the Bitcoin ETF was one of the major maker shapers and will continue with its effect well into 2019.
Bitcoin ETF’s were set for approval by the SEC, a move that did not through in 2018 as expected. However, the proposal is still on the table with the market looking forward to the SEC decision in Q1. Clearly, this issue played a big role in Institutional entrants into the crypto market as most preferred to hold on to their funds in other portfolios.
Other factors such as Scams, ICO’s & Digital Asset ATM’s & regulation also played a role in the direction we saw the crypto market take in 2018.
The much awaited SEC Bitcoin ETF decision has split the opinion of speculators with one camp projecting a significant effect while the other says it will have minimal impact. David Reischer is among those speculating on a significant effect, the CEO & Attorney of LegalAdvice.com says the BTC ETF long term price effect is inevitable. He said “If the SEC approves an ETF for Bitcoin in 2019, specifically the pending VanEck/Solid X application for a Bitcoin ETF, it could revolutionize the banking industry.”
This new product within the crypto markets reduces the risk for crypto appetite institutions. Its designed to do so through backing the product with actual BTC and a provision for insurance. Basically, institutional investors will be motivated to join the crypto bandwagon as a result of increased trust in the digital assets value variability.
Mr. Reischer added that Bitcoin might actually start another significant bull run if the SEC approves the Bitcoin ETF’s.
He said that the market dynamics favour tech oriented money managers and an SEC approval would mean safer sophisticated products to diversify their portfolios. The LegalAdvice CEO is optimistic that an $20,000 price would be achievable depending on the SEC’s verdict.
Another camp has supported this argument saying that a market correction for the digital assets is what steered and will continue to dominate the crypto market prices. LightSpeed CEO, Joshua Holmes, is among those who hold this opinion although he agrees to the mostly bearish 2018 market dynamics.
However, Holmes has remained sceptical about Bitcoin ETF’s surging the market direction by significant prices. In his view, the newly added funds do not necessarily translate to a positive reaction by BTC prices. This is because they are designed to settle in cash as opposed to direct investment in digital asset projects.
This view has been challenged by several market players including Bakkt. According to this school of thought, attaching any new product to BTC will in return drive volumes in all markets hence reducing the volatility experienced over the years.
The much hyped Bitcoin ETF’s may be turn out similar to Bitcoin futures and not surge the market as expected. However, a decision by the SEC to allow the ETF’s would boost investors and crypto project developers’ confidence to take digital currencies adoption on a new level.
In summary, most market prices are easily manipulated and this might be the case with BTC ETF’s just as we have seen repackaging of financial products to boost market activity in the past.