3 Drivers Of The Next Bitcoin and Crypto Bull Run

I want to examine three main factors in this post that will drive the upcoming digital asset boom:
These three drivers are:
1. The Securities and Exchange Commission declines to appeal a landmark court case loss to the biggest bitcoin trust in the US.
2. Twelve ETFs are lined up and waiting to launch their bitcoin ETFs with ~$22T assets under management (AUM)!
3. How a change in accounting rules could drive significant institutional inflows into bitcoin

1. The Securities and Exchange Commission declines to appeal a landmark court case loss to the biggest bitcoin trust in the US.
A significant step is the SEC's decision not to appeal a historic court case ruling against Grayscale's proposal to turn its bitcoin trust fund into an exchange-traded fund (ETF). The court determined that it was "arbitrary and capricious" for the SEC to reject the spot bitcoin ETF application while accepting a more risky futures-based ETF.
"I've been thinking we should approve one for the last five years," SEC Commissioner Hester Pierce said in a live CNBC interview, adding to the possibility that the ETF will be approved. Although the SEC still has the power to postpone the ETFs' approval, it appears that the legal arguments against it have mostly been used.

2. Twelve ETFs are lined up and waiting to launch their bitcoin ETFs with ~$22T assets under management (AUM)!
It's worthwhile to consider the potential implications if, or perhaps more likely, the bitcoin ETFs are approved. Currently, funds with an AUM of over $22 trillion have applied for about 12 spot bitcoin ETFs. For context, the current market value of bitcoin is approximately $666 billion.
Notably, because prices and markets are evaluated on the fringe rather than the average, price and market capitalisation increases might rise disproportionately for every $1 billion increase in net purchases.

What, then, are the majority of people overlooking in the ETF craze?
It's the first time we'll witness significant institutional inflows into an asset with a perfectly constrained supply, aside from the obvious. Just because demand rises doesn't mean you can produce more bitcoin.
Furthermore, a major reason why many institutions haven't looked into purchasing bitcoin yet is that they don't have access to an ETF. The legislative, policy, technological, and accounting obstacles that businesses must overcome in order to purchase and hold bitcoin have generally prevented any significant institutional inflows up to this point.
Consider how risk-averse S&P 500 corporations and pension funds would be about purchasing cryptocurrency through an exchange following the FTX scandal. Large corporations, sovereign wealth funds, financial advisors, and regular investors who simply don't want to be burned by another dishonest cryptocurrency entrepreneur like Sam Bankman-Fried will find that purchasing bitcoin through a regulated ETF product makes the investment simple and a familiar process.

3. How a change in accounting rules could drive significant institutional inflows into bitcoin
The final topic I wanted to discuss in this post is the Financial Accounting Standards Board's (FASB) recent announcements about the treatment of digital assets under fair value accounting.
Apple's CFO would have to mark down their balance sheet as having a $500 million impairment if they were to purchase $1 billion worth of bitcoin under the prior accounting treatment of the cryptocurrency known as "indefinite intangible accounting" if the price dropped by 50%.
However, Apple would not be able to write up the new value of bitcoin to $1 billion if its price doubled. The new regulations, however, will allow Apple and any other business that invests in bitcoin as a treasury asset to write up and down the value of its digital assets that are kept under fair value accounting. Given the possible issues it could cause with shareholder reporting and capital raising, it is noteworthy that many public CFOs would simply not consider purchasing bitcoin or other digital assets.

In summary, the aforementioned changes signify a substantial change in how digital assets�and bitcoin in particular�are treated. In the upcoming years, it appears that the introduction of an ETF, the legitimacy of bitcoin as an investment, and improved accounting treatment will all contribute to a substantial increase in volume and price movement.
Even while I still have a long-term structural optimistic outlook, it's important to remember that the state of the economy is unstable right now due to poor growth, rising inflation, and prolonged interest rates. Given that 62% of Americans live pay cheque to pay cheque, this will be a time of discovery for financial assets like bitcoin and other cryptocurrencies that have not been extensively tested in an environment of high interest rates and quantitative tightening.
Most people will probably find trading this market with a time horizon of less than five years to be too volatile, but I believe it will ultimately be worthwhile.
I appreciate you reading.
Spot Bitcoin ETF Applications & AUM