The world of cryptocurrency is currently abuzz with anticipation as discussions around a potential bitcoin exchange-traded fund (ETF) approval gain momentum. Coupled with the upcoming halving event scheduled for 2024, speculations about an unprecedented bull run and soaring prices have reached a fever pitch. But are these expectations grounded in reality?
To shed light on this matter, we turn to our esteemed expert, Tone Vays – a renowned Crypto Enthusiast, KOL, Analyst, Derivatives Trader, and Event Producer.
With a background on Wall Street, a Master's degree in Financial Engineering, and a wealth of experience as a derivatives trader and financial educator, Tone Vays is well-equipped to provide insights into the market's biggest expectations for the anticipated crypto rally of 2024. Additionally, he is the founder of the Financial Summit and Unconfiscatable, further solidifying his authority in the field. In this exclusive interview, we delve into Tone Vays' thoughts and analysis to gain a deeper understanding of the potential impact of bitcoin ETFs and the halving event on the future of the cryptocurrency market.
Metatalks: Why is the Bitcoin ETF crucial for the crypto industry? What would it mean for investors?
Tone Vays: I personally do not believe that the Bitcoin ETF is all that crucial for the Bitcoin industry. A GBTC is very, very similar to a Bitcoin ETF. It just trades on the pink exchange as a penny stock versus on a traditional exchange like a NASDAQ or the New York Stock Exchange. And once it's available, yes, perhaps more people would enter those positions, but the same person can always currently enter the GBTC. So I don't see it being as significant as many people think.
Metatalks: Why does everyone from Blackrock to Grayscale want to establish a Bitcoin ETF?
Tone Vays: The reason why everyone wants to maintain the Bitcoin ETF is because ETFs are very profitable. All you have to do is maintain the security of the underlying Bitcoin and you are collecting very good fees. GBTC, for example, collects a 2% annual management fee. So the biggest reason to have other ETFs is to compete on a lower management fee. But if, say, a hundred billion dollars were to enter the Bitcoin ETF, even a 1% annual fee or a quarter of a percent annual fee would create large revenue for the BTCs, for the ETFs sponsor.
Metatalks: What lessons can be learned from previous attempts to launch Bitcoin ETFs and the subsequent regulatory responses? Are there any notable case studies that highlight these challenges?
Tone Vays: The previous attempts at a Bitcoin ETF simply showed that the SEC does not want to approve a Bitcoin ETF. This is for several reasons. I believe the biggest reason SEC does not want to approve a Bitcoin ETF is because immediately everyone will file for every shitcoin ETF under the sun, from Ethereum, to Ripple, to Hex, to Bitconnect, and God knows what else. And it would be very difficult for the SEC to justify not allowing an Ethereum ETF if a Bitcoin ETF is to be allowed. And this is why I don't believe a Bitcoin ETF is going to be approved this year.
Metatalks: Considering the recent Grayscale lawsuit against the SEC regarding ETF approval, why is this case significant for the future of crypto regulation and the potential opening of the ETF market? How might the outcome of this lawsuit shape the regulatory landscape for cryptocurrencies?
Tone Vays: The lawsuit from Grayscale against the SEC shows that the SEC needs to provide better reasons as for why they are rejecting the Bitcoin ETF. And while it does increase the probability that a proper spot Bitcoin ETF will be approved by the SEC, it also opens the possibility that the current approval of future ETFs that the SEC had already approved could be removed and we go backwards in derivative instruments on traditional exchanges. To be honest, I don't think the Grayscale win changes much, except for the fact that the SEC now needs to come up with different reasons to shoot down the upcoming ETF proposals.
Metatalks: What impact did the halving of bitcoin have historically had on the pricing and dynamics of the market? Could you provide instances of other cryptocurrencies that had a halving as well and how it affected them?
Tone Vays: Throughout Bitcoin's history, the halving has been a huge positive to the price of Bitcoin. All prior halvings led to significant increases in the price of Bitcoin over the following 18 months. Hopefully this happens again this time next year. For all the other tokens, however, the halvings have been disastrous. In the case of Litecoin, for example, the price of LTC falls 80% after each halving versus Bitcoin and I'm expecting the same thing to happen again. The reason why altcoins fall in price after the halving is because a lot less people are interested in mining those coins and the security of those coins gets worse and over time there is generally less and less need for any of these altcoins. So the halvings are very bullish for Bitcoin, but very, very bearish for altcoins.
Metatalks: What are your predictions for the 2024 halving? How will it impact the entire market? Will Bitcoin experience a growth similar to its past performance? Can we anticipate a new rally?
Tone Vays: I am expecting Bitcoin to rally greatly in 2024 and even into 2025. The four-year cycle is playing out very, very similar to the prior three Bitcoin cycles. And I just don't see what is going to change it this time. We are still almost 50% below all-time highs.
We're about five months away from the halving, and things are in consolidation mode. But here's the deal: as the halving kicks in and the supply of Bitcoin decreases, coupled with more need for Bitcoin starts to enter the market from people being more comfortable with it, recognizing the bull market, and even corporations and other countries (besides El Salvador) jumping on board, along with ongoing geopolitical tensions worldwide, the demand for Bitcoin in 2024 is bound to skyrocket. I mean, with all the uncertainty surrounding the American election and various other elections worldwide, it's hard for me to fathom that Bitcoin won't experience a massive rally in 2024.
Metatalks: Is Bitcoin halving a good thing? Wouldn't halving the reward create a situation where miners would lose interest in Bitcoin? Because it's so expensive, and getting more expensive every year.
Tone Vays: From an economic perspective it would actually be a lot better for Bitcoin if it didn't have this once every four year shock and say the reward of Bitcoin dropped by a tiny percentage every day or every week or every month smoothing out the shock. However the media hype and the excitement that this single day causes once every four years creates so much positive media attention for Bitcoin that I'm actually happy that this event exists. There are events, there are conferences, there are parties, all of the economic activity and general excitement we call FOMO surrounds this single day that it has become a pivotal part of the Bitcoin ecosystem that helps drive the price even higher. So I am happy that this day exists and miners will adjust because they know it's a predictable event and some miners will have to shut down because they're no longer profitable but other miners will be able to take advantage of the situation.