Bitcoin Price Rally in 2018 to $50,000 could be Fuelled by ETFs
Thomas Glucksmann, the Head of Marketing at Gatecoin believes that bitcoin can reach the $50,000 mark in 2018. In an email to CNBC, the crypto exchange chief believes that that the emergence of a more defined regulatory framework, the inflow of more capital, and the implementation of technological advancements will push the price of bitcoin even higher.
Recent Price Decline
It has been a turbulent few months for the crypto market as a whole. Despite the stellar price performances recorded in 2017 by a number of crypto species, the momentum has fizzled out somewhat. BTC, ETH, and XRP surged by 1,300 percent, 8,000 percent, and 32,000 percent respectively. The price of bitcoin rose from under $1,000 at the beginning of 2017 to just under $20,000 by December 2017.
Then came the slide that has continued in fits and starts throughout January and February 2018. Renewed crypto crackdowns in China and rumors of an imminent ban in South Korea caused massive selloffs that diluted the price of bitcoin and other cryptos.
ETFs May Spark the Bitcoin Revival
One of the reasons for the price increase experienced by bitcoin in 2017 was the introduction of futures trading for the cryptocurrency. The establishment of bitcoin futures attracted increased participation from the bulls which invariably contributed to the rising profile of bitcoin as a tradable commodity in 2017. The bitcoin futures that were launched by CME and CBOE were a firm favorite of the bulls.
In 2018, the introduction of bitcoin ETFs could have the same effect. ETFs, short for exchange-traded funds, are investment instruments that allow arbitrage trading on a commodity. ETFs, due to their relatively low trading and tax costs, are a firm favorite of investment traders. A bitcoin ETF will track the price of the commodity, and allow trading in the cryptocurrency without having to purchase cryptocurrency from an exchange. There are a number of bitcoin ETFs being developed with the CBOE having already filed six bitcoin ETFs with the SEC.
ETFs have the potential to attract a great deal of institutional capital into the bitcoin market. Many seasoned traders and investors who do not like the traditional crypto investment space could find the bitcoin ETF model to be more within their comfort zone. There are still issues with price volatility and overseas market manipulation that could delay the actualization of bitcoin ETFs. However, the future looks indeed bright for bitcoin and the crypto market.