Cathie Wood: Bitcoin ETF Unlikely Until Market Cap Is $2 Trillion


Cathie Wood CEO Ark Investments

A Bitcoin ETF is unlikely until the market cap is around $2 trillion, according to Ark Investment Management CEO Cathie Wood.

At the time of writing, the Bitcoin market capitalization is just over $582 billion, so we need to see a 300% increase if Wood’s assumption is correct.

Ark Investment CEO Cathie Wood was speaking on the Big Ideas 2021: Technological Breakthroughs Investors Shouldn’t Miss webcast, the Securities And Exchange Commission (SEC) wouldn’t consider a Bitcoin ETF until the market cap is high enough for them to feel comfortable.

‘The flood of demand has to be satisfied,’ said Cathie Wood. ‘So it’s going to have to get well over a trillion dollars – $2 trillion, I think, before they will feel comfortable about it.’

When Bitcoin BTC ETF

The Ark Investment CEO is bullish, however, on the imminent appointment of Gary Gensler as the chairman of the SEC.

Former CFTC commissioner Gary Gensler is a well-known blockchain and digital assets advocate, and said he is ‘very pro Bitcoin.’

Gensler, who taught a blockchain course at MIT in 2018 is believed to be President Biden’s choice to lead the SEC. After he takes the reins, it’s hoped we will see more regulatory clarity than under Jay Clayton’s tenure.

If Cathie Wood Is Right, Bad News For Valkyrie and VanEck?

As Bitcoin Maximalist reported yesterday, Valkyrie Digital Assets filed its Bitcoin ETF proposal last week, and we know VanEck filed its proposal for its The Vaneck Bitcoin Trust with the SEC on 30 December 2020.

So, does it look like bad news for both companies? If Cathie Wood is correct and the SEC won’t consider an ETF until Bitcoin is near on $2 trillion market cap, then a x3 is needed.

The SEC has a total of 240 days to give an answer to each filing, so both companies should hear something by Q3.

A three times rise in value is a long way off, but as we know Bitcoin moves quick, especially in bull markets.

Some have predicted $42k was the top. However, many others believe we are just getting going, and the “conservative” price prediction of Bitcoin to USD $100k is more than x3 from here. All of a sudden, $2 trillion doesn’t seem so distant.

Of course there are no guarantees we will get there this cycle, but many prominent Bitcoiners and macro analysts believe we will.

Some say a wall of institutional money is coming into the Bitcoin market, and with MicroStrategy hosting the the inaugural Bitcoin for Corporations conference next week it’s expected to expedite institutional adoption of Bitcoin.

The Ark Investment CEO alluded to the wall of money that could enter the space, saying, ‘Bitcoin was playing a pivotal role in corporate cash, and if companies from the S&P 500 were to put 1% of their cash into Bitcoin, that would increase the price of bitcoin by $40K.’


Bitcoin ETF Or Not, Institutional Adoption Is Happening

Many Bitcoiners are torn on the idea of a Bitcoin ETF. One should open the floodgates to much more accessible funds entering the space, but derivative products are everything Bitcoin isn’t.

New derivative products are one of the side effects of Bitcoin’s success, but there’s nothing any Bitcoiner can do about it.

ETFs are just one way for investors to get easy access to Bitcoin, but these products will likely be more attractive to retail investors. 

Institutions will likely want the underlying asset, and we are seeing this already with the likes of MicroStrategy and Marathon adopting a Bitcoin Standard for their treasury reserve policy.

A Bitcoin ETF will be introduced one day, and then many more will follow. Will Cathie Wood be correct in her assumption? We will find out soon, maybe.

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