A number of interesting posts has emerged in recent days underpinning the notion that bitcoin is getting closer to Wall Street. Obviously, this has much to do with the massive price rally we have seen this year, but I’m under the impression that at least some of the parties working on bitcoin investment possibilities are in it for the long haul.
VanEck, a mutual fund and ETF investor company, managing USD 25 billion, has filed to launch a Bitcoin ETF with the SEC. Contrary to other attempts like that of the Winklevoss brothers, VanEck has a long-term history in managing funds and ETFs. ‘The proposed exchange-traded fund, according to the filing, would not passively track the performance of Bitcoin. Instead, it would be an actively managed ETF with investments in “Bitcoin-linked” derivatives.’
More on the VanEck launch here (Business Insider)
Interestingly, the launch comes days after one of VanEcK’s leading strategists called bitcoin a fad. Joe Foster wrote:
Bitcoin and other digital currencies are a fad that has attracted the attention of programmers, speculators, and early adaptors. Given the fundamental characteristics of gold and digital currencies, we do not believe digital currencies will ever replicate or replace gold’s unique role as a form of portfolio insurance and as a hedge against tail risk. It is my opinion that governments will not allow digital currencies to reach the critical mass needed to challenge the utility of fiat currencies. At best, digital currencies may eventually occupy some middle ground as a niche product.
See Joe Fosters’ blog on bitcoin here.
While emphasizing that gold is a better safe haven than bitcoin does not necessarily imply an active bitcoin ETF is without meaning, the timing of the two events remains remarkable.
Goldman Sachs: ‘It’s getting harder for institutional investors to ignore cryptocurrencies’
Now Goldman Sachs also put out some research that the price of bitcoin could rise another USD 500 before falling very, very hard. All this is based on, for me difficult to comprehend, technical analysis. Especially given the fact that bitcoin has pretty extreme risk-return characteristics and a very short price history. Mind you I’m not saying the price of bitcoin can’t collapse, a quick look at realized volatility shows this can happen at any moment, but I’m puzzled by the TA explanation behind it.
Read more here
One conclusion seems fair though, bitcoin and Wall Street are moving towards each other for now.