Major cryptocurrencies were little changed on the week as market participants awaited more news on exchange-traded funds from the Securities and Exchange Commission and ahead of bitcoin’s 10-year anniversary.
At about 4 p.m. EDT Friday, bitcoin (BTC) was up 0.8 percent for the week at $6471.56. Ripple (XRP) was up 0.6% at 46 cents, while ether (ETH) was essentially unchanged at $202.72 and bitcoin cash (BCH) was down 0.9 percent at $436.67.
“The market has been very sideways this week,” Timothy Tam, co-founder and CEO of CoinFi, tells ThirtyK, “and bitcoin volatility has been relatively low.” Many people are taking a “wait and see approach,” he said.
Volatile equity markets, from which investors have been pulling cash, could end up helping crypto, he added, as retail investors look to other asset classes. However, “that by no means that cryptocurrency is a haven at the moment. Far from it.”
Investors are waiting on an SEC decision about another proposed bitcoin exchange-traded fund proposal after the regulator published a memorandum this week from an Oct. 9 meeting with VanEck and SolidX. The SEC has already rejected a slew of proposals. Market participants have pointed to an ETF as a way to engage a broader audience in bitcoin. However, the SEC has cited concerns that insufficient transparency could lead to manipulation.
Meantime, the SEC announced the creation of a new office – the Strategic Hub for Innovation and Financial Technology, or FinHub – that will work with industry and the public on financial technology, including distributed ledger technology and digital assets.
Anthony Pompliano, founder and partner at Morgan Creek Digital, agrees. “We need more regulated financial products that allow retail investors to access bitcoin,” he tells ThirtyK. He said he wouldn’t be surprised if the process is delayed further, however, into the first quarter of 2019.
The Future of Bitcoin
With few obvious drivers this week, market participants were left to mull over what the next decade will bring for the digital currencies market ahead of the 10th anniversary of Satoshi Nakamoto’s release of the bitcoin white paper.
Bitcoin enjoyed several years on its own until other major competitors emerged over the last few years. Since then, hundreds of cryptocurrencies have debuted, with many existing only briefly. “Bitcoin has matured a lot in the first 10 years,” said Pompliano, “and I anticipate growth in the next 10 years will be larger and faster. The genie is definitely out of the bottle.”
Matsumura, however, isn’t as keen on the cryptocurrency. He points to what he calls “an unfortunate pattern in the market” of all crypto assets correlating with bitcoin.
“It suggests the market has a very hard time differentiating between low-quality altcoins and serious projects,” he said. In this environment, a runup in bitcoin could allow resources to flow into poorly run projects, he added.
While Matsumura voices confidence the industry will eventually be worth 10 times what it is today, he envisions one that’s based on banking the unbanked. “Many more applications are coming on top of that,” he said, “but the base layer will be fintech adoption and innovation.”
Nigel Green, founder and CEO of deVere Group, writes in a press release that bitcoin’s influence and dominance of the cryptocurrency sector will “drastically reduce” in its second decade as mass adoption of cryptocurrency grows, and more and more digital assets launch, increasing competition for bitcoin and denting its market share.
He anticipates cryptocurrencies’ market capitalization gaining at least 5,000 percent from current levels over the next decade, increasing $400 billion to $20 trillion. “There’s an ongoing shift away from fiat money, and the momentum of this is only set to increase over the next 10 years,” he said.
Looking Ahead to Bakkt
Heading into the end of 2018, Tam anticipates an uplift with the launch of bitcoin futures on the Bakkt platform, slated for Dec. 12. The parent company of the New York Stock Exchange, Intercontinental Exchange (ICE), announced the date, according to a document released Oct. 22.
“We could see a similar December bull run as we saw in 2017 when CME/CBOE futures launched,” Tam said.