From CompliNEWS | Financial Service Intelligence Watch

Legalbrief Forensic

Estimates of new capital coming into Bitcoin during 2024 range from $500bn to $1trn, which would double its market cap, at the very least, writes University of Johannesburg professor, Steven Boykey Sidley, in the Daily Maverick.‘Every year I write an article that pokes fun at the “Crypto is dead” crowd. Not because there is nothing new to write about, but because it is a great deal of fun to periodically smirk at the tedious certainties of loudmouthed financial soothsayers’ Sidley says since 2013, there have been 474 reports of crypto death. ‘Crypto is now in stage 4 – the ‘then you win’ stage. Erstwhile sceptics and sniggerers within the financial and investment world have stopped laughing. There are a few remaining holdouts like Warren Buffett and Charlie Munger, who don’t seem to understand crypto at all. And, of course, some governments, especially the US, for whom the success of cryptocurrencies would mean the loss of some financial control over their citizens. But the list of ex-naysayers now enthusiastically joining the party is getting longer by the day.’ According to Sidley, now, every major global institution is knee-deep in blockchain projects ‘But these projects pale in comparison to the pressingly pregnant Bitcoin ETF landscape (ETFs are funds that pool together the money of many investors to invest in a basket of securities), with the largest investment banks in the US all awaiting approval on their outstanding ETF applications with the SEC (Securities Exchange Control), some of them years old.’

He notes that the biggest of these is BlackRock, which manages about $10trn in assets, giving them as much influence on global financial affairs as most countries (they manage almost as much money as China’s GDP). ‘They are an old-style, conservative, smoky-backroom investment behemoth, not known for risk. Their CEO, Larry Fink, famously called Bitcoin an ‘index of money laundering’ in 2017. He now admits it will ‘revolutionise finance’ and is about to smooth the way for the injection of hundreds of billions in customers’ money into his ETF when it is approved (likely to be this year, given the signals of surrender from Fort SEC).’ Sidley believes the rocket-rise in Bitcoin prices over the past few weeks is evidence of consumer demand fuelled by this Bitcoin ETF optimism. ‘When the funds are approved, the price will rise further under the dictates of supply/demand laws, and will continue to do so as more investors finally shed their fear and reluctance and decide to put their trust in Larry Fink’s Damascene conversion. Obviously, speculation on the price of crypto assets has long been a fool’s game; the streets are littered with the crumpled hopes of crypto gamblers. It is different this time. Capitulation of the old guard is in the air. This is no longer your cypherpunks and speculators and early adopters and tech nerds and extreme libertarians.’ Therefore, he, says in the DM analysis that it looks like Bitcoin will become a permanent part of the asset landscape, along with gold, silver, stocks, bonds, collectables and real estate.

Read the Full Daily Maverick analysis here