Tokenizing in 2024: Crypto is Here to Stay!
The pro-crypto movement is winning, and it’s really just the beginning. A calendar year of catalysts is already underway in 2024 for cryptocurrency holders around the world, but smart money knows that the best is yet to come.
It’s amazing to consider that last October, it felt like Bitcoin at $25,000 would be a permanent reality. It was even worse in 2022 when the Bitcoin price sank to $16,000 for a hot minute.
In hindsight, that was the time to load up on cryptocurrency. However, it was only after Bitcoin boomed in late 2023 that the financial media pundits decided it was time to get on board.
This can’t just be attributed to a Santa Claus rally or hopes of multiple interest rate cuts, though those may have been contributing factors in Bitcoin’s rally to $43,000. The main factor was excitement over the prospect of one or more approved spot Bitcoin ETFs.
For many retirement accounts (such as IRAs), pension plans (including 401(k) plans), and mega-sized institutional funds, directly buying Bitcoin has been impossible – or at least restricted. Spot Bitcoin ETFs can enable indirect access to Bitcoin’s price moves, and these funds could open the floodgates to billions of dollars pouring into the cryptocurrency market.
Grayscale had been applying to convert its Bitcoin futures-based fund into a spot Bitcoin ETF for a while, but SEC Chairman Gary Gensler kept rejecting Grayscale and all other applicants. It was yet another example of government bureaucrats failing to understand the blockchain and its many benefits to society.
What they did understand perfectly is that Bitcoin and Ethereum pose threats to the hegemony of the always-deteriorating U.S. dollar. Still, they couldn’t block Bitcoin ETFs for too much longer, especially when financial behemoth BlackRock lobbied to get its spot Bitcoin ETF approved.
Fast-forward to January 10, and after a false start the previous day, the SEC finally relented and approved 11 spot Bitcoin ETF applications. Fidelity and BlackRock are among the big-money firms getting into the Bitcoin ETF game early and aggressively.
This truly is a watershed moment since one estimate projects approximately $27 trillion in assets under management from a handful of financial giants potentially flowing into the crypto space. Even so, Bitcoin isn’t even back up to its 2021 peak price of around $69,000.
There was some profit-taking in Bitcoin immediately after the 11 aforementioned spot Bitcoin ETF approvals. This was to be expected because some investors anticipated a “sell the news” type of event.
A few days of profit-taking doesn’t alter the long-term trend, though. The bigger story here isn’t even about spot Bitcoin ETFs. It’s really about tokenization or the widespread adoption of Bitcoin and Ethereum as valuable real-world currencies to transfer funds across borders and purchase a wide variety of products and services.
In other words, Bitcoin and Ethereum are becoming accepted as real money in America and worldwide. BlackRock CEO Larry Fink declared that the spot Bitcoin ETF approvals are “just stepping stones towards tokenization.” Fink added, “I really do believe this is where we’re going to be going. We have the technology to tokenize today.”
He’s saying what we’ve been saying for years: crypto is here to stay. And it’s not just about Bitcoin because a spot Ethereum ETF would be the next logical progression. An argument could even be made that Ethereum is more important than Bitcoin since Ethereum is the foundation for smart contracts and the blockchains of numerous altcoins.
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For a while, Gensler may be resistant to the idea of approving a spot Ethereum ETF. The SEC chairman declared, “Importantly, today’s Commission action is cabined to [exchange-traded products] holding one non-security commodity, bitcoin. It should in no way signal the Commission’s willingness to approve listing standards for crypto asset securities.”
Still, this hasn’t stopped the Ethereum price from rallying to $2,500 recently, which isn’t bad performance since ETH-USD was down to $1,500 in October. Going forward, Ethereum could actually outperform Bitcoin when Gensler eventually softens his stance against it just like he inevitably did with Bitcoin.
Finally, investors should bear in mind that the Bitcoin fund approvals aren’t the only crypto-positive catalyst for early 2024. The next Bitcoin halving event is expected in April, and this will reduce Bitcoin miners’ base block reward to 3.125 bitcoins, or approximately $137,500 at recent prices.
It didn’t always happen immediately, but the Bitcoin price has moved substantially higher after previous Bitcoin halving events. 2024 could be a spectacular year for both Bitcoin and Ethereum in a “rising tide lifts all boats” scenario.
I’ve cited two positive crypto catalysts, and the year is just getting underway. If there’s any takeaway here, it’s that the crypto critics are trying to swim against an increasingly powerful tide as big money pours into the cryptocurrency market. Plus, don’t sleep on Ethereum because it could soon be front-page news just like Bitcoin is today.
Chief Editor, CrushTheStreet.com
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