Traders tip bitcoin to hit $US100,000 within five years
Cryptocurrency advocates are tipping the price of bitcoin to reach $US100,000 within the next five years if approval of the first exchange-traded funds for digital assets opens the floodgates to institutional investors.
Lisa Wade, the chief executive of DigitalX, which runs two digital asset funds for wholesale investors, said “really grounded” analysis by her team suggested that bitcoin would easily reach the equivalent of six figures in US dollars in the near future.
DigitalX chief executive Lisa Wade and Trovio chief investment officer Vimal Gor on stage at the Summit. Peter Rae
“I think a lot of people in the industry have PTSD after last year, but it’s undeniable over the long-term horizon that [bitcoin] will be a really great investment class,” she told The Australian Financial Review Cryptocurrency Summit.
“If just 1 per cent of all global wealth was put into bitcoin, that gets us to $US100,000 within five years,” she said.
Not to be outdone, Richard Galvin, chief executive and co-founder of Digital Asset Capital Management, said he could see bitcoin reaching $US101,000 in the same time period.
Mr Galvin added that DACM had been fielding interest from institutional and sophisticated investors, including family offices, looking for exposure to alternative assets.
“We only deal with wholesale, sophisticated investors and the vast majority are coming from overseas,” he said.
“They’re probably at 1 or 2 per cent allocation [...] maybe up to 5 per cent in some cases.”
At the Financial Review’s first Crypto Summit in April last year, SkyBridge Capital founder Anthony Scaramucci predicted bitcoin would hit $US500,000. At the time it was trading around $US42,000 but more than halved in the following six months.
On Monday, bitcoin was trading around $US27,000.
Self-managed superannuation funds have also piled into bitcoin and other cryptocurrencies, with the latest Australian Tax Office data showing more than $950 million is allocated to the asset class.
Both Ms Wade and Mr Galvin cited the ongoing push by global institutions to establish exchange-traded cryptocurrency funds as a potential catalyst for inflows to the industry.
Several traditional wealth management giants, including BlackRock, Fidelity, Ark Invest, VanEck, JPMorgan and BetaShares, have all signalled to US regulators their desire to operate ETFs that track bitcoin’s price. The decision remains with US regulators.
Vimal Gor, who left fund manager Pendal in 2022 to join alternative fund manager Trovio, said when a bitcoin EFT was launched he expected institutional adoption to happen quickly.
“Institutional adoption begets more institutional adoption. If you go back to pre-the Blackrock ETF filing, it was debatable whether it was even considered an asset class [...] there’s no question whether it’s an asset class now,” he said.
“I’m a strong believer that institutional adoption and retail adoption will happen a lot quicker when an ETF comes and I think that will turbocharge the whole space.”
Speaking at an earlier session, Jeff Yew, the chief executive of crypto asset manager Monochrome, also noted the big names backing bitcoin ETFs, which would hold actual cryptocurrencies for investors, as a sign of institutional interest.
“That shifted the entire taboo of talking about bitcoin in professional finance. The career risk of talking about bitcoin, or having that sort of conversation is now almost fully removed in the US,” he said.
Jeff Yew, founder and CEO of Monochrome, is trying to get two new crypto ETFs approved in Australia. Michael Quelch
“I think the ETF will unlock a lot of institutional wave investment into crypto that wouldn’t otherwise touch it outside the regulatory structure.”
Mr Yew, former chief executive of cryptocurrency exchange Binance Australia, has been trying to get two new crypto ETFs approved in Australia, lodging his intention with the Australian Securities and Investments Commission and the ASX.
While Mr Yew did not disclose if or when Monochrome’s proposed ETF would be likely to hit the market, he did say he was watching US developments. Mr Yew pointed to January 10, which marks final deadline for the US SEC to review ARK’s ETF application, as a date he was watching closely.
“January 10 is an update that a lot of people in this industry are laser-focused on. We’re doing the same thing as well.”
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