Is Crypto Dead? Bernstein Analyst Says Not So Fast
In recent months, the price of bitcoin has experienced a notable decline, causing some to question the future of cryptocurrency. However, according to Bernstein’s digital assets analyst, Gautam Chhugani, the crypto industry is far from dead.
Despite the 5.8% drop in bitcoin’s price over the past six months, Chhugani argues that the growing potential for crypto adoption by institutions and enterprises is a sign of a robust industry. One of the main catalysts for this potential adoption is the pressure put on the U.S. Securities and Exchange Commission (SEC) by a court decision involving Grayscale in August.
The U.S. Court of Appeals for the D.C. Circuit ruled in favor of Grayscale, a crypto investment giant, against the SEC’s denial of its application to convert its Grayscale Bitcoin Trust into an exchange-traded fund (ETF). This decision has opened the doors for other institutions to pursue similar applications.
In fact, several major asset managers have expressed interest in launching bitcoin ETFs, including BlackRock, Fidelity, Franklin Templeton, and Invesco. Currently, there are applications for eight bitcoin ETFs, three ether ETFs, and 15 ether futures ETFs.
Chhugani also points to the increasing activity across various sectors in the crypto space as a positive indicator. For example, more than $6 trillion in stablecoins are settled on public blockchains on an annualized basis. Additionally, major financial players like Visa and PayPal have announced plans to integrate stablecoins into their platforms.
The potential for a Bitcoin ETF led by global asset managers has significantly improved, according to Chhugani. He believes that these industry leaders are recognizing the value and potential of the crypto market, despite the current price fluctuations.
While the price of bitcoin may not accurately reflect the health of the crypto industry, the growing interest from institutional investors and the increasing adoption of stablecoins suggest that crypto’s prospects remain promising.
It’s clear that crypto is not dead, as Chhugani emphasizes. The industry’s resilience and potential for continued growth should encourage both investors and enthusiasts to look beyond short-term fluctuations and focus on the long-term potential of cryptocurrencies.