SEC Approval of Bitcoin ETFs Could Come This Week

The entire crypto community — and investors nationwide — will be thrilled about the launch of the first-ever spot bitcoin ETFs, which the SEC may approve as soon as Wednesday or Thursday, with the launch of these funds expected no later than Jan. 10.

My prediction: These ETFs will collectively represent the most successful ETF launch in history, ultimately receiving hundreds of billions of dollars in assets flows over the next three years.

I also predict that $150 billion will flow into these new spot bitcoin ETFs from independent RIAs.

Add in the flows from financial advisors working at the nation’s largest brokerage firms, regional and independent broker-dealers, as well as institutional and individual investors, and we could easily see trillions of dollars flowing into bitcoin over the next few years.

While the spot bitcoin ETF sponsors are understandably excited about this potential asset flow, investors themselves are ecstatic — because everyone is assuming that these massive new flows will cause bitcoin’s price to skyrocket. Bitwise (which offers one of the new ETFs) says the price of bitcoin will be $80,000 by the end of 2024. Standard Chartered, one of England’s biggest banks, says bitcoin will end 2024 at $100,000. Venture Capitalist Tim Draper says bitcoin will be $250,000 by year’s end.

My view? I haven’t said much about 2024, but I have been vocal about 2025: I believe bitcoin will be $150,000 within two years. I’m not alone in this prediction; AllianceBernstein also says that.

Considering the projections for 2030, Techopedia predicts bitcoin will be $120,000. JPMorgan says $150,000, while Coinpedia says bitcoin’s price in 2025 will be $350,000 and ARK Invest (another ETF sponsor) says it will be $1.48 million. Notably, no one seems to be predicting a decrease in bitcoin’s price from its 2023 ending value.

These projections imply significant gains: 2x to 6x in 2024, 4x to 9x by 2025, and 3x to 35x by 2030. Such forecasts understandably stir excitement, especially when compared to the stock market’s projected 2x gain by 2030. No wonder three in four financial advisors plan to allocate 1% to 5% of client assets to these new spot bitcoin ETFs.

Despite all this excitement, we need to temper our enthusiasm. The mere launch of these ETFs will not cause bitcoin’s price to double, triple or quadruple immediately.

The SEC’s approval is not a light switch; it’s going to take time for asset flows to occur — and those who don’t realize this important fact are likely to experience disappointment from unfulfilled expectations. The disappointment could morph into regret when negative headlines highlight the fact that asset flows in the first weeks aren’t as high as expected.

Although I’m predicting that independent RIAs will place $150 billion into spot bitcoin ETFs over time, asset flows will be muted initially. To understand why, let’s look at the three channels of advisory field: Wirehouses, IBDs and RIAs.