Bitcoin finally ran through the much ballyhooed $100,000 level. The largest cryptocurrency has struggled to hold that level. But experts believe the significance of reaching that price point and the $2 trillion market capitalization should not be understated.
Predictably, there are implications for a variety of ETFs, including spot bitcoin products like the VanEck Bitcoin ETF Trust (HODL). Leading up to Election Day, and as bitcoin ascended soon after, advisors and investors poured capital into ETFs like HODL. That confirms there’s ongoing enthusiasm for the crypto/ETF wrapper pairing. Favorable post-election headlines have helped, too.
“The combination of Trump’s victory, coupled with his recent nomination of crypto-advocate Paul Atkins as the next SEC chair, has signalled a potential shift towards a more crypto-friendly regulatory environment,” noted Gabriel McKeown, head of Macroeconomics at Sad Rabbit Investments. “Consequently, the implications of this new milestone are far-reaching, with a breaching of the long-anticipated $100,000 barrier acting as a potential watershed moment for the digital currency.”
Crypto Stocks Benefiting, Too
Experienced investors know crypto rallies aren’t always confined to the world of digital assets. There are a variety of stocks on the market today that are credibly “crypto-correlated.” That means they’re responsive to the moves — in both directions — by bitcoin and others.
“Whether you’re a crypto believer or unbeliever, in breaking the $100k barrier, Bitcoin has arrived. Ordinary investors who are interested in exposure to crypto and haven’t yet got their head around wallets, exchanges and long secret pass phrases have options,” observed Faisal Sheikh, managing director at Monmouth Capital. “An example is a London-listed fund, the VanEck Crypto & Blockchain Innovators UCITS ETF. It holds a collection of companies exposed to Bitcoin, cryptocurrencies and blockchain technologies, such as Coinbase, Microstrategy and Riot.”
The U.S.-listed equivalent of the fund referenced above is the VanEck Digital Transformation ETF (DAPP). There’s no denying DAPP has been responsive to the recent bitcoin surge. For the month ending Dec. 6, that fund surged almost 30%.
Investors may also want to monitor ETFs such as the VanEck Ethereum ETF (ETHV) because experts believe the bitcoin rally also marks the start of a new altcoin season.
“ETF flows are still strong and show that Bitcoin has succeeded as an asset, although unfortunately not as a method of payment. Expect Altcoins such as Ethereum to benefit from this current bull market as Altcoins begin to pick up steam after Bitcoin stops for a breather,” according to Prem Raja, head of Trading Floor at Currencies 4 You.
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