Peter Schiff Warns of Bitcoin Crash After ETF: Is This a Bullish Signal?
Peter Schiff has made a career out of hating on Bitcoin.
Key Takeaways
- Despite optimism on a Bitcoin ETF approval, economist Peter Schiff warns of a potential downturn.
- Schiff’s skepticism is rooted in concerns about the market’s ability to absorb ETF shares.
- Mike Novogratz anticipates significant institutional adoption of cryptocurrencies in 2024.
The value of Bitcoin has undergone remarkable growth since its inception in 2009, soaring by tens of thousands of dollars. Its recent substantial surge is primarily attributed to impending significant institutional developments — Spot Bitcoin ETFs.
Nevertheless, this rapid price escalation is regarded with caution, particularly by Peter Schiff, a prominent American economist and vocal crypto skeptic. Schiff firmly believes that the impending introduction of a Bitcoin ETF may open the door to a significant downturn in the cryptocurrency market.
Bitcoin Approaches $38,000
Schiff initially recognized the gradual ascent of Bitcoin toward the $38,000 threshold, attributing this movement to widespread anticipation for the approval of a spot Bitcoin ETF by the United States Securities and Exchange Commission (SEC).
Notably, the leading digital asset is currently valued at $37,233, reflecting a 0.8% increase in its value over the past 24 hours.
Schiff, known for his anti-Bitcoin stance, said that with the launch of a Bitcoin ETF, many of the current onlookers will have already invested in the cryptocurrency. As these early adopters aim to capitalize on their investments through sales, Schiff anticipates a shortage of buyers for the ETF, potentially resulting in a market crash.
In reaction to his post on Twitter, numerous cryptocurrency investors expressed dissenting views regarding Schiff’s perspective on Bitcoin and the anticipated market downturn. The public urged caution in heeding this prediction, categorizing it as another addition to a list of inaccurate forecasts made by the economist.
Shiff’s Warning As Contrarian Bullish Signal
Despite occasionally facing criticism for his somewhat underwhelming investment-picking track record, Schiff undeniably stands out as one of the most influential figures when it comes to offering investment advice within social networks. Nevertheless, it is evident that the effectiveness of his investment recommendations has gradually diminished over the years.
A similar phenomenon is evident with the influential TV host Jim Cramer . Stocks he recommends or criticizes often witness increased trading volumes, influenced by his presence and the perceived impact on other investors. In fact, a phenomenon known as the Inverse Cramer Signal has often times been used to buy stocks said to be going down by Cramer.
Originally recognized as a successful hedge fund manager, Cramer transitioned to build a thriving business centered on creating content for investors.
In this new role, his primary concern appears to be less about the accuracy of his stock picks and more about appearances and ratings. His current approach seems to prioritize the sensational and controversial aspects of stock picks to boost ratings.
While this approach may attract attention and improve ratings, the combination of a high volume of recommendations and a focus on controversy has ultimately resulted in subpar returns.
Upcoming Bitcoin ETF Approval and a Surge to $135,000?
Meanwhile, cryptocurrency experts remain optimistic about the imminent arrival of a spot Bitcoin ETF and its potential to propel the entire crypto market, particularly Bitcoin, to unprecedented levels.
Bloomberg ETF analysts Eric Balchunas and James Seyffart have once again emphasized a strong likelihood, placing a 90% probability, that approvals for Bitcoin ETFs will materialize by January 10.
Seyffart expressed confidence in a substantial wave of approvals from the SEC occurring simultaneously. Just a few days ago, John E. Deaton, a supporter of XRP and the founder of CryptoLaw, suggested that the SEC’s approval might align with the Bitcoin halving event and the Federal Reserve’s decision to reduce interest rates, actions that could trigger a truly parabolic price surge.
Considering these advancements and the potential approval of twelve U.S. Bitcoin ETF applications, there exists a significant upward potential for Bitcoin, with projections reaching as high as $135,000 in the near term, as indicated by Robert Kiyosaki, the author of “Rich Dad Poor Dad.”
Novogratz Predicts 2024 Institutional Crypto Adoption
Recently, Mike Novogratz, the founder of Galaxy Digital, has informed investors that 2024 may witness significant institutional adoption of cryptocurrencies, fueled by the anticipated approval of Bitcoin spot ETFs.
Speaking during Galaxy Digital’s third-quarter earnings call on November 9, Novogratz underscored the firm’s conviction that approving multiple ETFs is no longer a question of “if” but rather “when.” In Q3 2023, the fund manager, in collaboration with Invesco, submitted applications for spot Bitcoin and Ether ETFs to the United States Securities and Exchange Commission.
November 2023 saw a shift in investor attitude towards bullishness, with well-known ETF research experts projecting that by January 2024, the SEC will have approved 12 significant applications for Bitcoin spot ETFs.
“2024 literally is going to be a year of institutional adoption, primarily first through the Bitcoin ETF, which will be followed by an Ethereum ETF,” Novogratz stated during the Q3 earnings call .
“As institutions get more comfortable, if the government gives its seal of approval that Bitcoin is a thing, you are going to see the rest of allocators starting to look at things outside of that. And so, money will flow into the space.”
Novogratz went on to say that as investments “in tokenization and wallets” increase, institutional investment may reach a tipping point by 2025. The CEO of Galaxy Digital added that maintaining dollar-backed stablecoins as a vital component of the larger cryptocurrency ecosystem ought to be a top priority for the American market.
