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The Bitcoin price more than doubled in 2023. This also has to do with the plans of the world‘s largest asset manager.
Why is the Bitcoin price rising? Last week, Bitcoin exceeded the $38,000 mark for the first time in a year and a half. An important reason is the hope that a Bitcoin ETF could soon be approved in the USA. An exchange-traded index fund – issued by Blackrock, the world‘s largest asset manager, a player from the “old world“. So far, the US Securities and Exchange Commission (SEC) has rejected applications for crypto ETFs, but according to several media outlets, discussions are now taking place again between Blackrock and the SEC. What if the SEC says yes this time? “When a company like Blackrock gets involved, it’s something like a seal of trust,” says Tatjana Puhan, head of investment at asset manager Copernicus, in “Eco Talk”.
This is something like a seal of trust.
According to Desirée Velleuer from Crypto Consulting, a similar product in Canada brings together a good billion dollars. The stock market in the USA is 20 times larger than the Canadian one, “so there is a lot of potential there.”
Do Swiss banks trust crypto currencies? At Zuger Kantonalbank, customers have been able to trade cryptocurrencies like stocks for a good two months. The Lucerne and St. Galler Kantonalbank, as well as Postfinance, have announced corresponding offers. “Banks have to offer this in order not to lose their competitive advantages,” says Desirée Velleuer from Crypto Consulting.
Too much fluctuation, too many unanswered questions.
But there are also warning voices: Raiffeisen chief economist Fredy Hasenmaile says that there are still “too large fluctuations, too many unanswered questions regarding regulation, transparency and massive energy consumption” in cryptocurrencies.
Didn’t crypto fans want to eliminate intermediaries like banks? Thanks to the blockchain, storing all data on numerous servers and making banks unnecessary as intermediaries: That was the idea of crypto supporters at the beginning. Now, of all things, it seems that the connection to the conventional financial system is driving the Bitcoin price. Not everyone in the crypto scene likes that. According to Desirée Velleuer, there are two currents there: Supporters of the basic idea that blockchain technology enables money transfers without banks continue to rely on decentralized exchanges. Supporters of the other trend only rely on fully regulated providers such as the Swiss crypto banks Sygnum and Seba. “There you may have a somewhat smaller universe of investment opportunities, but more security,” says Velleuer.
Aren’t the scandals hurting Bitcoin? Binance, the world‘s largest crypto exchange, just paid over $4 billion in fines for violating money laundering laws in the United States. The CEO resigns. And at the beginning of November, Sam Bankman-Fried was convicted and faces up to 115 years in prison. He, the founder of the crypto exchange FTX, had embezzled customer assets. And the Bitcoin price? He rises. Desirée Velleuer provides a possible explanation: Dealing with these scandals could have a positive impact on the course because it would lead to more regulation. “This gives institutional investors more security, so they are more likely to get involved.” The downside: the more there is regulation, the more returns are likely to normalize – away from dream returns as they have sometimes been in the past.