The firm believes the approval of a spot Bitcoin ETF in the United States will trigger an influx of over $30 billion in subsequent months.
The mainstream adoption of Bitcoin (BTC) by institutional investors has put the gold market on notice with a possible decoupling in the coming few years. According to a report by Matrixport, Bitcoin is about to challengegold as a store of value due to the simple fact that the former has outperformed the latter in the past years. Additionally, the demand for Bitcoin has significantly increased in the past year despite the FTX and Alameda Research collapse that wiped out more than $30 billion from the nascent industry.
Notably, more than 10 fund managers with a combined market capitalization of more than $17 trillion have applied with the United States Securities and Exchange Commission (SEC) to offer spot Bitcoin Exchange-Traded Funds (ETF). Interestingly, the SEC lost a case against Grayscale Investments for lacking sufficient evidence on why the former could not convert its GBTC product to spot Bitcoin ETF. As a result, experts believe the chances of a spot Bitcoin ETF approval in the coming six months have exponentially increased.
Matrixport on Why Bitcoin Is Better than Gold
According to Matrixport, an all-in-one crypto financial services platform, Bitcoin has a better shot at becoming the global store of value than gold in the coming years. Moreover, Bitcoin is a better cross-border asset compared to gold, which requires a lot of regulation requirements to facilitate similar services. Additionally, Bitcoin is more versatile and offers cheaper but high-quality services to all users without discrimination.
“Even today, storing assets in the form of gold has not only become unfashionable in the digital age but comes with significant restrictions when crossing borders,” wrote Markus Thielen, head of research at Matrixport, adding that “Bitcoin offers a solution to this dilemma, enabling the swift and relatively inconspicuous movement of value across borders.”
The adoption of Bitcoin to mainstream users has come under scrutiny by global regulators amid claims that the digital asset is being used by different countries to navigate global sanctions. The ongoing war between Russia and Ukraine and recently between Israel and Gaza, has significantly affected the global supply of oil and gas products.
The fact that Bitcoin has a higher volatility due to the high speculation from global investors, Matrixport expects its market capitalization to rally beyond that of gold, which has an uncapped supply.
“Therefore, considering the current state of technological developments, bitcoin’s primary roles are likely as a store of value akin to gold and a speculative financial asset,” the report added.
Market Outlook and Price Action
The Bitcoin (BTC) market value has hovered between $500 billion and $600 billion in the past few months, but experts at Matrixport believe more than $30 billion could flow into the Bitcoin market after a spot ETF approval. Currently, the Bitcoin price action is awaiting the halving event early next year to trigger the larger crypto bull run.
nextAltcoin News, Blockchain News, Cryptocurrency News, News
Author Steve Muchoki
Let’s talk crypto, Metaverse, NFTs, CeDeFi, and Stocks, and focus on multi-chain as the future of blockchain technology. Let us all WIN!
Share:
Newsletter
Your e-mail *
subscribe
Thank you!
You have successfully joined our subscriber list.
While early-stage crypto companies may still find willing investors, late-stage tech investors have largely exited the space.
The crypto industry, which once thrived on investor exuberance and rapid growth, has recently hit a rough patch as venture funding for crypto startups in the third quarter of this year plungedto its lowest level since 2020.
According to data from research firm PitchBook, Venture Capitalists (VCs) invested just $2 billion in crypto space during the quarter, marking a staggering 63% decline from the same period in the previous year.
The Decline in Crypto Funding
The dramatic decline in venture funding for crypto startups in Q3 2023 has many factors at play. One of the key reasons, as highlighted by PitchBook analyst Robert Le, is the notable absence of the “big deals” that were once common in the crypto space. The deals have become smaller in scale, leading to a decrease in overall investment volume.
During the crypto bull market, companies like the FTX Derivatives Exchange, OpenSea, and Yuga Labs enjoyed the benefits of mega fundraisers, attracting substantial investments from venture capitalists eager to ride the wave of digital assets and blockchain technology. However, as the crypto industry faces increasing scrutiny and regulatory challenges, the tide seems to be turning, with venture capitalists pulling back significantly.
The declining interest of VCs in the crypto industry poses a critical challenge for startups. Le expressed his concern, saying, “If they’re not able to raise a round, even a down round, they’re either going to go out of business or get acquired at a valuation that’s much, much lower.” This dilemma leaves startups with limited options, making survival a daunting task.
While early-stage crypto companies may still find willing investors, late-stage tech investors have largely exited the space. This shift reflects a broader trend of investors becoming more cautious and discerning in their crypto investments.
SBF’s Trial and the Impact on Venture Capitalists
Adding to the complexity of the situation is the continuing fallout from the FTX scandal. FTX, once a rising star, has faced legal troubles, with its former CEO Sam Bankman-Friedand other executives facing criminal fraud charges. This has raised questions about the role of VCs in the crypto industry and their investments in companies like FTX.
Sequoia Capital, a prestigious VC firm, was among those that had invested heavily in FTX. However, the scandal has forced VCs to reevaluate their involvement in the crypto space. FTX and its trading arm, Alameda Research, had also made their own venture bets and built a diverse portfolio of companies, including stablecoin providers Circle and Paxos, blockchain developer Aptos Labs, and crypto bank Anchorage Digital.
The startup stakes held by FTX and Alameda are now being closely watched as FTX navigates bankruptcy proceedings. The presence of a new funding roundfor AI startup Anthropic, in which FTX invested, has provided some hope that creditors might be compensated through the sale of equity.
However, there is a significant concern that a massive liquidation sale of these startup stakes could lead to a further devaluation of crypto startups.
nextBusiness News, Cryptocurrency News, Investors News, News
Author Benjamin Godfrey
Benjamin Godfrey is a blockchain enthusiast and journalist who relishes writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desire to educate people about cryptocurrencies inspires his contributions to renowned blockchain media and sites.
Share:
Newsletter
Your e-mail *
subscribe
Thank you!
You have successfully joined our subscriber list.
