Ether crosses $2,400 as investors consider its spot ETF potential: CNBC Crypto World

CNBC Crypto World features the latest news and daily trading updates from the digital currency markets and provides viewers with a look at what’s ahead with high-profile interviews, explainers, and unique stories from the ever-changing crypto industry. On today’s show, Ric Edelman, founder of the Digital Assets Council of Financial Professionals, discusses what to expect for crypto markets long term if spot bitcoin ETFs get approved.

Chapters:
00:00 – CNBC Crypto World, Jan 10, 2024
0:28 – Ether soars
2:11- The headlines
6:13- Ric Edelman of DACFP

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Ether crosses $2,400 as investors consider its spot ETF potential: CNBC Crypto World

Today the countdown for the sec’s decision on spot Bitcoin ETFs enters its final hours at the same time the agency scrambles to investigate an incident on its X account and Rick Edelman founder of the digital assets Council of financial professionals weighs in on the impact of an SEC decision on crypto

Markets welcome to cnbc’s crypto world I’m Mackenzie sigalos crypto prices are mixed as invest ERS await a decision on spot Bitcoin ETFs which could happen any minute now as of 300 p.m. Eastern when this show is going up we don’t have an announcement on spot Bitcoin ETFs quite

Yet as of noon Eastern Bitcoin fell to the $45,000 level after trading at a nearly 2year High the past couple of days the price of the cryptocurrency dropped during late afternoon trading yesterday following a false social media post from the ex account account of the SEC that stated the agency had approved

Bitcoin ETFs for trading we’ll get to more on that in just a bit ether however soared more than 6% to $2400 as analysts at CNBC spoke with said that they believe the market is now thinking about an SEC approval of spot eth ETFs that decision is expected to happen beginning

In May meanwhile grce scale’s Bitcoin trust dropped nearly 2% since noon yesterday trading at around 38 bucks according to Y charts the discount on gbtc compared to bitcoin itself was around 65% now this morning fund Strat Global advisor managing partner Tom Lee joined CNBC squawkbox where he discussed his

Oneyear and five-year price target for Bitcoin with the sec’s ETF decision in the mix I think in the next 12 months uh something over 100,000 you know maybe 150,000 and you know in the next five years again it’s you know it’s a there’s a finite Supply and now we have a

Potentially huge increase in demand with a spot Bitcoin approval so I think in 5 years you you know something around half a million would be potentially achievable okay let’s talk about all the latest and the push for a spot Bitcoin ETF in the US and we have to start with

The sec’s controversy on X now on Tuesday around 4 p.m. a tweet from the sec’s X account claimed that the agency had approved a spot Bitcoin ETF that turned out not to be the case a spokesperson from the agency told CNBC in a statement quote the sec’s at secv

X/ Twitter account has been compromised the unauthorized tweet regarding Bitcoin ETFs was not made by the SEC or its staff the confusion around that post also sent bitcoin’s price swinging wildly spiking above $47,000 before quickly retreating now a little later an SEC spokesperson told CNBC that an unknown party had accessed

Its ex account account a little after 400 p.m. Eastern and that the agency was investigating the matter alongside law enforcement and its Partners the SEC and the police won’t be the only government officials looking into this incident either US senators JD Vance of Ohio and Tom Tillis of North Carolina sent a

Letter to the SEC demanding that the agency send a briefing on this incident by January 23rd Senator Vance said it was unacceptable that the agency entrusted with regulating the epicenter of the world’s Capital markets would make such a colossal error and this morning former SEC chairman Jay Clayton

Joined CNBC squawkbox to react to this event I think it demonstrates that everybody needs better cyber hygiene and constant cyber Hing and yes is there look let’s not let’s not bu that is there irony here are control systems part of the sec’s proview sure is Market manipulation something that the SEC

Enforces and deals with and and our both of those at issue here yes which is why I go back to what do you do you communicate with your constituencies and tell them what you’re doing to address those things now at the same time asset managers are still

Marching ahead with the last touches to their ETF filings in these Final hours before the sec’s deadline both Black Rock and Arc 21 shares updated fees for their ETF proposals joining a growing race among prospective issuers to cut fees at in turn just made increased market share if these ETFs come to

Fruition Black Rock reduced its fee from 3% to. 25% and Arc 21 shares dropped its fee from. 25% to. 21% William Quigley the co-founder of tether joined cmbc Squawk on the street this morning where he argued that the ETFs would open up a huge base of new institutional Capital

He outlined the questions he has about the mechanics of those spot Bitcoin ETFs how will the institution s uh think about the suitability of this for their clients there is a massive amount of discretionary Capital that these institutions control uh will will uh the suitability tests how will they be

Conducted uh what about margin you know you can get 60% margin on a lot of stocks uh is this a marginable asset um in in exchanges in places where people currently acquire big Bitcoin they’re able to access loans using the Bitcoin that they own uh they can they can

Borrow against it I don’t know what uh a lot of these institutions are going to say many of them may just say we’re not going to open this up to anybody but institutionalsales of self-directed investment platforms they may say buy and sell as you wish all right let’s stick with ETFs for our

Main story ahead of that much anticipated decision I spoke with Rick Edelman the founder of the digital assets Council of financial professionals about what to expect for crypto markets longterm if they do win approval as of right now there has been no decision on spot Bitcoin ETFs the

Agency is widely expected to approve at least one application so let’s talk about that outcome if the SEC does approve one of those applications and it does come to Market what’s your take on the significance of a decision like that for Bitcoin and crypto more broadly well

This is clearly the biggest event for crypto in 10 years this is the Holy Grail of crypto everybody’s been waiting for a spot Bitcoin ETF because ETFs are the most popular investment vehicle in America for all the obvious reasons they’re low in cost high in liquidity they’re extremely affordable you can buy

Them in an ordinary brokerage account where you can easily rebalance and dollar cost average and tax loss Harvest easy for advisers to engage on behalf of their clients as well as for retail investors and it’s been elusive the SEC has repeatedly said no so the availability finally after a decade of

Attempts to bring these to Market is going to create a flood of new assets from both retail investors and investment advisers but not right away Mac it’s going to take time for these asset flows to occur months frankly not days or weeks now what kind of buyin would you expect for these products

What’s the makeup would you say for retail versus institutional participation you know there wasn’t much excitement for the E future ETFs that hit the market in 2023 How would this be different yeah it’ll be different for a very fundamental way most people don’t buy Futures I mean do you buy stock

Futures if you don’t buy stock futures why would you buy Bitcoin Futures so it’s a very different product and that’s why it didn’t get all that much excitement um but there are about 20 25% of us Americans who own Bitcoin today a whole lot more are referring to

Themselves as crypto curious they would like to own it but they found it daunting because you know opening an account on a crypto exchange and dealing with hot and cold wallets and private Keys that’s intimidating but the ETF makes all those issues go away and it makes this product now available simply

Easily conveniently in a very familiar format so we think retail investors are going to engage in this and relatively in big numbers advisers too have said the same thing they have been unable to provide Bitcoin to clients because of the lack of an ETF now that it’s here 80

Plus percent of advisers say they’re going to allocate to it the average allocation will be and a half% of the portfolio that’s going to translate to 100 to20 billion dollars of asset flows over the next couple of years now would you expect other kinds of crypto ETFs to

Come to Market some people are pushing for ethereum ETFs of course there’s still a lot of contention around whether certain crypto assets are securities or Commodities so what’s your outlook for that long term yeah this is just the beginning so we’re going to see a whole

Array of new products come out as you said in ethereum ETF eventually that’s going to take a long time the SEC is moving slowly look how long it took to bring the Bitcoin to Market uh so the ethereum ETF will take a while you’ll see combination ETFs this is after all a

Single asset ETF Bitcoin only so a combination of Bitcoin and ethereum is going to be popular you’re also going to see more trading strategies you’ll find inverse ETFs you’ll find 2X and 3X ETFs uh you’ll find actively managed ETFs where they’ll move with the market and

An attempt to beat the index so this is just the beginning over the next few years you’re going to have dozens and dozens of ETFs using a wide variety of trading and investment strategies just like you have in the stock market now what do you make of wall Street’s hype

For crypto heading into 2024 it seems that at least Bitcoin is back in style but what about crypto more broadly and and separately how do you see investment advisors thinking about the space this is a rising tide scenario so ethereum is rising as much as Bitcoin is in fact it

Did better last year than Bitcoin uh in a lot of the funds like uh at eth at eth um so we’re going to see um mainstreaming of crypto as we have the biggest Wall Street firms engaging JP Morgan Goldman Sachs uh Fidelity Black Rock Franklin Templeton Invesco when

You’ve got these kinds of trillion doll powerhouses getting engaged it’s not going to take long for this to become ubiquitous in portfolios both the retail and institutional levels and this is why advisers are going to be engaging they’re going to hurry up because there’s so much Market

Competition the SEC is likely to approve many maybe most perhaps even all of these applications that’s creating a lot of marketing and a lot of competition massive advertising by these ETF providers that means investors are going to pay attention they’re going to call their advisors they’re going to say

Should I invest how much should I invest which one should I buy advisors are therefore going to engage because fomo is going to set in the fear of missing out so you’re going to find a lot of folks jumping into this over the next couple of years and that means the price

Of Bitcoin is going to Skyrocket you already started to get into this but long term what’s going to be more popular spot or Futures Bitcoin ETF uh spot there’s no question and same as in the stock market you know spot equities are much more popular than Futures uh

Trading so this will be no different but they both have a place because some investors prefer to trade Futures contracts as opposed to buying spot uh just like you’ve got some people engaging in short positions so they all have a role in the Diversified portfolio and based on your investment strategy

Your attitude and your outlook and your risk tolerance so they’ll all have a place in the marketplace okay that’s all for crypto world today but we will be back again tomorrow with the latest on the SEC decision on spot Bitcoin ETFs we’ll see you Then