Bitget Newsletter 3

This week's newsletter delves into the recent surge of Bitcoin, surpassing expectations and setting new benchmarks since April 2022. We also discuss some projections made by market experts, the growing institutional interest, and the significant implications of a potential spot Bitcoin exchange-traded fund (ETF) in the United States. In addition to this, we also examine how institutions are already gaining indirect exposure to the crypto market. Finally, we turn our focus to the United Arab Emirates (UAE), a nation rapidly establishing itself as the hub of cryptocurrency thanks to its progressive regulations and ambitious ventures in the blockchain space.

There isn't much news to report this week, so we shall start by diving into the latest market movements.

Bitcoin has again crossed the $40,000 threshold, a level not seen since April 2022. Its latest surge means that Bitcoin's price has risen over 140% since the start of the year, signaling a robust recovery and potentially a new era for the digital asset.

On the back of this news, many professionals within the space have voiced their opinions on the future of Bitcoin. For instance, Markus Thielen, Head of Research at Matrixport, says Bitcoin's future looks exceptionally bright. Thielen suggested that based on previous cycles and the anticipation of upcoming Bitcoin halving, Bitcoin could soar over $60,000 by April next year and reach as high as $125,000 by the end of 2024.

Adding to the momentum is the speculative excitement surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. With 13 bidders, including giants like BlackRock and Grayscale, the crypto community eagerly awaits the Securities and Exchange Commission (SEC) decision. Bloomberg's ETF analysts anticipate a high probability of simultaneous approvals for all pending bids by January 10, potentially marking a new chapter of institutional participation and investment in Bitcoin.

The correlation between the anticipated Bitcoin ETF and historical trends in commodity ETFs is getting much attention. Bitcoin analyst Willy Woo draws parallels with the SPDR Gold Trust ETF, which led to an 8-year rally in gold prices.

Ethereum (ETH) has also shown strong appreciation in price, surpassing $2,200, a height not reached since May 2022. Many Altcoins are also flourishing in the current market conditions. At the time of writing, Total2 (the cryptocurrency market cap excluding Bitcoin) is on the verge of breaking out of a trading range it's been in for the last 18 months!

The recent revival of Bitcoin and the wider cryptocurrency market hints at the possibility of an impending bull run. While some consider these predictions to be hasty, it's important to recall that cryptocurrencies once achieved a $3 trillion market capitalization without significant institutional engagement. Considering this, imagine the potential trajectory with a new wave of institutional investment in the next bull run.

While numerous institutions are poised to invest directly in Bitcoin pending the approval of a Bitcoin spot ETF, it appears that many have already begun to discreetly engage with the cryptocurrency market through investments in publicly traded companies.

Eric Balchunas, a Bloomberg ETF analyst, points out that the approval of a Bitcoin spot ETF by the U.S. Securities and Exchange Commission could potentially unleash $30 trillion into the Bitcoin market. He notes that a substantial portion of this capital remains uninvested due to regulatory restrictions. To circumvent these barriers, several investors are seeking indirect access to the cryptocurrency sector by investing in companies like Coinbase and MicroStrategy, which have significant crypto holdings.

A closer examination of financial data reveals that institutions might have been quietly channeling funds into the crypto sector for the past year. At the time of this writing, Coinbase has witnessed a remarkable 330% increase in its value since the beginning of the year. Similarly, MicroStrategy has seen its value surge by nearly 300%.

These statistics underscore the keen interest of institutions in a spot Bitcoin ETF. Furthermore, the growing instability in traditional financial sectors, highlighted by the precarious state of many banks and one of the worst bond market crashes in 250 years, is intensifying the search for alternative assets. This turmoil raises a critical question: Could Bitcoin be the sought-after alternative for institutions to safeguard their wealth?

In recent years, the United Arab Emirates (UAE) has emerged as a forward-thinking leader in the world of cryptocurrency and blockchain technology. This progressiveness is primarily due to its adaptive and friendly regulatory frameworks, which have been pivotal in attracting many companies and startups in this sector.

At the forefront of these regulations is the Virtual Asset Regulatory Authority (VARA), which has played a crucial role in developing a crypto-friendly environment. VARA has implemented policies that balance innovation with investor protection, setting a benchmark for other nations to follow. For example, in November 2023 Abu Dhabi recently unveiled an official regulatory framework targeting decentralized autonomous organizations (DAOs) and various entities operating on digital ledgers. This development is a key part of Abu Dhabi's strategic push to position itself as a frontrunner in the field of digital asset innovation across the Middle East.

The introduced framework facilitates the legal operation of DAOs and authorizes them to distribute tokens to their participants, thereby offering a well-defined regulatory landscape for businesses in the digital asset sector. Such advancements haven't gone unnoticed. Open-source blockchain developer Iota recently unveiled the Iota Ecosystem DLT Foundation in Abu Dhabi. This new foundation aims to broaden the reach of its distributed ledger technology (DLT) across the Middle East. Backed by a substantial investment of $100 million in Iota (IOTA) digital tokens, allocated over a period of four years, the foundation is setting a solid foundation for growth and innovation.

Dominik Schiener, a co-founder of Iota, expressed that the foundation's primary goal is to digitize physical assets, transforming them into digital formats. This is a significant step towards propelling technological advancement in the region. Hamad Sayah Al Mazrouei, the CEO of the Abu Dhabi Global Market Registration Authority, emphasized the country's ambition to become a hub for the blockchain industry, marking a significant commitment to this cutting-edge technology. I expect to see similar developments come out of the region over the next year.

This is brought to you by @TheCryptoMann1, @CryptoinsightUK, and @ItsRagnarYT, who have recently partnered with Bitget to help provide the latest cryptocurrency news and technical developments. Be sure to check out their Discord, “ Trading Insight " for more information!

Disclaimer: The views, information, or opinions expressed in the report are intended for informational and educational purposes only. It is not intended or offered to be used as legal, tax, investment, financial, or other advice. Under no circumstances are Bitget, our employees, agents, partners, and/or co-operations responsible for any decision made, action taken, or result obtained from or in reliance on the use of the information herein. Any investment or trading ideas, strategies, or actions should never be taken without first taking into consideration each individual's personal and financial situation and/or without consulting financial professionals.