The Bitcoin (CRYPTO: BTC) price has retreated from Wednesday's new all-time highs of US$66,930 (AU$89,240).
The digital token's lost 6% since then, currently trading for US$62,845.
Interest in the world's biggest crypto remains elevated, with more than US$45 billion worth changing virtual hands over the past 24 hours, according to data from CoinMarketCap.
With that level of interest in mind, the Motley Fool reached out to 3 crypto experts for their take on BITO, the new US listed, futures-based Bitcoin exchange traded fund (ETF), and their forecasts for where the Bitcoin price could be heading next.
(For details on the launch of the ProShares Bitcoin Strategy ETF (NYSE: BITO), go here.)
Now, on to our expert panel:
- Jonathon Miller, managing director Australia of cryptocurrency exchange Kraken
- Peter Kazacos, owner of Kaz, technology partner for Quantum Digital Assets Limited
- Simon Peters, market analyst at global online trading platform eToro
The launch of BITO
The Motley Fool: The launch of BITO garnered a lot of investor excitement and looks to have helped drive the Bitcoin price to new highs. What are your thoughts on a futures-based Bitcoin ETF, and will we ever see something similar on the ASX?
Jonathon Miller: The launch of a Bitcoin ETF is an exciting moment for the maturation of the digital assets industry and a good measure of where Bitcoin is in its adoption journey.
The timing of the BITO launch is also significant in that it went live when the Bitcoin price was reaching all-time highs. We saw US$1 billion in trading volume on the first day which is a great achievement, and another of the many positive news stories we have seen lately for crypto adoption.
We can expect that Australian regulators are watching what happens in the US and will use this as a framework for decisions on local products. It's hard to predict when this will happen, but the success of BITO so far is a very positive thing.
Peter Kazacos: Anything that makes it easier for investors to get exposure to an asset is a good thing for that asset. In the case of BITO, it's a good thing for Bitcoin. The ETF means large institutional investors and investment houses can easily participate in a very traditional sense in the fortunes of BTC. A futures-based ETF like BITO paves the way to a spot ETF in the near term, which would be a significant milestone and have a positive impact on the Bitcoin price.
It is likely that we will one day see an Australian Bitcoin ETF as demand for the asset continues globally.
Simon Peters: While ProShares (BITO) is not an ETF holding the underlying asset that many in the crypto community want to see, it's still a step forward in the right direction.
A Bitcoin futures ETF now provides a convenient way for investors to get exposure to the Bitcoin price movement. However, investors who plan to hold for the longer term would need to take into account 'hidden fees' within the futures ETF. Contracts will have to roll every month, and this could erode potential gains.
BITO saw a strong first day of trading. However, with more Bitcoin futures ETFs in the approval pipeline, whether this particular ProShares Bitcoin futures ETF can carry this momentum forward, we'll see.
Where to now for the Bitcoin price?
Motley Fool: After posting a new all-time high this week, what is your outlook for the Bitcoin price movement?
Jonathon Miller: This rally has been driven by an incredible year of crypto adoption news for Bitcoin as well as Ethereum. The two coins have both shared leading roles in the news cycle, dragging each other down and bringing each other up in the market.
The all-time Bitcoin price high earlier this year was largely due to institutional interest where we saw adoption from big names such as Fidelity, Tesla and PayPal.
There is no way to predict the market, but it's important to highlight that Bitcoin has scarcity with only 21 million in total in supply. And there are a lot more people in the world than that. The space is moving very quickly, and we know from Kraken Intelligence reports that the final quarter of the year has historically been the most bullish.
However, after price hikes, there is always the risk that we will see price drops as people look to take a profit.
Peter Kazacos: Mass adoption is the buzz word for any Bitcoin maximalist. If we see more mass adoption, which we define as BTC entering the traditional financial system, we will see more demand for the asset, which will fuel Bitcoin price increases.
If Bitcoin finds more champions – like Jack Dorsey from Twitter and President Bukele from El Salvador – we could very well see a US$100,000 Bitcoin price in the near future.
Advances in technology are the biggest risk for Bitcoin. Specifically the advent of quantum computing, which could break current cryptography. Kaz has a solution which uses quantum technology to upgrade the cryptography of existing protocols like BTC.
Quantum Assets on the Binance Smart Chain are the first crypto to adopt our quantum technology and are using it to launch Quantum Bitcoin in a bid to ensure the cryptography of Bitcoin remains safe and secure.
Simon Peters: Now that we've seen a new all-time Bitcoin price high, the question is turning to whether we'll see a pull back or will the price carry on. Given the price run in the last few weeks, the Bitcoin price is somewhat overextended and we could (very soon) see a pullback in the short term as some investors and traders take some profit off the table.
Long term, on-chain metrics continue to be bullish. More of the circulating Bitcoin supply is continuing to migrate from short-term holders to long-term holders, which is squeezing supply. Simultaneously, inflation concerns could increase demand, with institutional and retail investors exploring alternative assets like Bitcoin rather than traditional inflation hedges or holding cash.
Also taking into account seasonality, the fourth quarter tends to be a strong time of the year for crypto bull markets. Refer back to 2017 for example. So, I wouldn't rule out higher prices than where we are currently by the end of 2021, possibly into the six-figure zone.
Invest with care
The Motley Fool will end with a recap of Jonathon Millers' words, "There is no way to predict the market."
While the Bitcoin price could head into the six-figure range from here, it could also go the other way.
Invest with care.
