All cryptocurrency markets have taken another beating over the past few days. Most of this negative momentum stems from the delay involving a Bitcoin ETF. Investors are clearly overreacting to such developments. Pantera Capital’s Dan Morehead is convinced things will improve in the future.
Bitcoin ETF Delay Causes Panic
Up until this point, the SEC has not shown any indication that it will ever approve a Bitcoin ETF. The agency is primarily concerned over market volatility and the lack of regulation. This has caused numerous ETF proposals to be rejected in the past few years. Last week, the SEC delayed its verdict on the VanEck proposal.
As a result of this delay, the Bitcoin price lost nearly 12% in value over the past 36 hours. Many altcoins have lost even more in the same period. This panic reaction by investors was expected. It seems the “hopium” associated with Bitcoin ETFs has clouded the judgment of many investors and speculators. Those are also the findings of Pantera Capital’s Dan Morehead. He is convinced traders are overreacting to this news for no apparent reason.
Speaking on CNBC’s Fast Money yesterday, Morehead said:
The main thing to remember is that bitcoin is very early-stage venture, but has real-time price feed — and that’s a unique thing. People get excited about the price and overreact.
No one should expect the SEC to approve a Bitcoin ETF in the near future. It is a lengthy decision-making process and one that doesn’t favor Bitcoin. Until proper regulatory guidelines go into effect in the US, this will always be an uphill battle. Bitcoin is still in the very early stages of recognition and legalization. That is an important factor which is often overlooked.
As Morehead reminds us:
I still think it will be quite a long time until an ETF is approved. The last asset class to be approved for ETF certification was copper, and copper has been on earth for 10,000 years.
Changing the Narrative
Investors need to take the stated importance of a Bitcoin ETF with a grain of salt. Various proposals have already been shot down or canceled and this delay on the VanEck ETF decision doesn’t make it any more susceptible to approval. But the good news is – and this should be our new mantra – is that the Bitcoin industry doesn’t need an ETF to be a success in the long-term.
There many other things going on in Bitcoin right now that will have a more lasting and significant impact than an ETF. One of the most recent developments is the newly announced Bakkt project. Developed by NYSE parent company Intercontinental Exchange (ICE) in partnership with Microsoft and Starbucks, Bakkt is a cryptocurrency platform that will enable users to easily buy, sell, store, and spend their digital assets.
Speaking about the project, Morehead declared:
That’s huge news. […] That is going to be a very profound impact over the next five or 10 years for the markets, and, to my mind, that’s what people should be focused on.
Compared to 2017, Bitcoin is still in a good place. Traders often forget Bitcoin was worth just $200 not that long ago. This currency has come a very long way ever since and the best has yet to come. Putting this industry in its proper perspective always need to be the number one priority. From a long-term perspective, the Bitcoin puzzle pieces are all falling into place rather nicely.
Are people overreacting to the ETF delay? How important is it to Bitcoin’s long-term success? We want to know what you think in the comments below.
Images and media courtesy of Flickr/TechCrunch, CNBC