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Bitcoin ETFs and Business Adoption Are 2 Key Crypto Enablers To Watch Out For

By on November 19, 2021 0

Crypto enthusiast Chris MacDonald chats with Eric Bleeker of The Motley Fool about why he believes Bitcoin (CRYPTO: BTC) ETFs and the growing adoption of crypto by businesses could be key factors to watch out for in the long term, in this episode of “The Crypto Show” by Backstage Pass, recorded on November 10.

Eric Bleeker: Tim Cook said he has been interested in crypto for some time. He is personally invested in space.

Now here is what I think is going to be interesting. We have had MicroStrategy (NASDAQ: MSTR) [laughs] reporting last night I think they exceeded 9,000 Bitcoins in their treasury. One of the bullish cases for Bitcoin is that if you have the adoption of treasury in the large S&P companies, it is going to put strong positive pressure on the price of Bitcoin.

Tim Cook says, for now, his investment is personal. It’s not something Apple (NASDAQ: AAPL) considering on its balance sheet. But Chris, I would point it out. The fact that someone of Tim Cook’s stature says he personally owns it is just another positive sign from the luminaries of Silicon Valley, who are genuinely interested in crypto in general.

Chris MacDonald: Tim Cook is someone people listen to for sure. I think Apple is a business in general that people look to where they’re putting their excess money, because whether it’s Apple or Berkshire Hathaway (NYSE: BRK.A), companies with over $ 100 billion in cash sitting there – where are they going to put it?

Most of the time, these are negotiable securities or short-term bills. But there are companies, either You’re here (NASDAQ: TSLA), these are high-profile cases of companies putting their money in the form of Bitcoin and deciding to branch out into crypto a bit to get those returns. I think it’s an interesting thesis that there could be more adoption on the business side.

I think you’re also going to show a bit more data on the venture capital space and how much capital is going into Bitcoin a bit later, so there will be more on that. But I think in terms of Bitcoin or Ethereum (CRYPTO: ETH), some of the bigger names, this will probably continue to be a big driver.

Bleeker: Yes. Here is such a pilot. We are looking at the inflows into Bitcoin, and the reality is that right now there is a lot, we are, something that is decentralized and deregulated by nature, there have been a lot of factors holding back investment in things like Bitcoin.

We recently witnessed the launch of the first Bitcoin ETF. This week, however, there is another opportunity that many investors could throw away because it’s not from America so you’re not going to see a lot of coverage i.e. Australian regulators have gave the green light to the crypto-exchange at the end of October. funds, which could see Bitcoin and Ether ETFs move on the country’s stock markets in the coming months.

Now two points I want to make about this and why I highlighted it among all the potential news this week. Number 1, which we have just below. Australia may be a small country. I believe it has only 25 million people, but it has the fifth largest pool of pension assets in the world, which is an incredible number.

Second, I know very well that Australia has an investor nature. The Motley Fool has been in Australia for a long time. It’s an incredibly prosperous market for us, in part because there are a lot of regulations that drive people to invest and make it a privileged space.

Let’s see a quote here, what you’re going to see is literally every month an additional 50 or 100 million will go into crypto ETFs in Australia. It doesn’t take very long before it becomes a large number, and it comes from a local, let’s just say, space expert. And as a reminder, when we look at a potential catalyst going forward, the US has only allowed Bitcoin futures ETFs to launch and that may seem like a trivial point, but it certainly means there is a lot less capital entering the space and there could be.

The first Bitcoin futures ETF was launched and raised $ 550 million in funds on day one of trading, which, again, is a number with no context, but here’s the context that matters. The ETF that has the highest amount of entries is a Vanguard ETF and what it added on that first day is about five times the level of the Vanguard ETF, which I might note is larger, the scale of order of magnitude larger than even the 10th largest ETF. This launch was truly historic.

Chris, when you look at this, what do you think is reasonable to expect ETFs as a major catalyst for Bitcoin in 2022?

MacDonald: I think the United States is obviously the biggest market in the world for ETFs. But when you look around the world and see where other countries are going, Australia is a great example. I know Canada has launched a Bitcoin ETF which is actually linked to the detection of Bitcoin.

There are markets where these ETFs have been launched. There is a precedent for that. This suggests that regulators may not have as much trouble doing this in the United States if it is already done, say in Canada or Australia, which are smaller markets in terms of population but have quite a bit of capital as you mentioned. This is important news as these markets are opening up to the innovation that ETF companies are trying to deliver. This lends itself well to what is happening in the United States as well. This is an important thing to watch out for for sure.

Bleeker: Yes, I think that’s a good point, this precedent will make it easier for regulators.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.