Bitcoin has already priced in spot ETF approval: Expert

Crypto investors of all sorts are patiently waiting on spot bitcoin ETF approval from the Securities and Exchange Commission, with the price of bitcoin (BTC-USD) soaring in anticipation of the potential sign off. Dinara Co-Founder & CEO Laurence Latimer joins Yahoo Finance to discuss what would happen both immediately, and down the line, if the ETF is approved and how other cryptocurrencies can benefit from it.

Latimer believes "it would be a massive event for the industry" and that it would be a "great support for the institutionalization of digital assets and the mainstreaming of digital assets, widespread adoption." However, he also believes that "much of the price movement has largely been priced in" and that there is some "frothiness" in bitcoin prices.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JARED BLIKRE: As the markets price in rate cuts into the new year, those in crypto are betting big money on a spot Bitcoin ETF and it becoming a reality as the SEC gives companies a new deadline of December 29 to make final changes to their applications. The new deadline has led many industry watchers to predict a wave of approvals come January, but not necessarily news there. Bitcoin is now trading above $42,000, reaching levels this month we haven't seen since April of 2022.

And for his take on what is coming next for crypto, let's bring in Laurence Latimer, the co-founder and CEO of Dinara, a crypto-trading platform. Laurence, thank you for coming in here today. So what is the importance of this spot Bitcoin ETF? I've been tracking this for months. I've been seeing the enthusiasm. But I guess the big question is when we get this finally maybe on January 10, is it a sell-the-news event?

LAURENCE LATIMER: Yeah, and I thank you for having me. First of all, as we come down to thinking about what's happening for the Bitcoin approvals-- Bitcoin ETF approvals, the reality is much of the enthusiasm, as you just said, much of the attention has-- and much of the price movement has largely been priced in. That's what we think here at Dinara, and that's certainly what we believe.

It's going to be a massive event for the industry. The work that's gone into that from some of the largest firms in the industry has been happening over two-- some of them over two years. So it is a really massive event. It's a great sort of support for the institutionalization of digital assets and the mainstreaming of digital assets, widespread adoption. But we do think there's maybe a little bit of frothiness there and that the kind of price movement that many are expecting to see may already be mostly priced in.

BRAD SMITH: And so with that in mind, do you think about the perhaps tail, the longer tail of it? We'll see a jump, perhaps, early on in inflows into some of these ETFs, but then what after that? What is perhaps a good baseline for us to consider looking at the amount of flows that actually make their way into one of the riskier parts of the asset classes out there?

LAURENCE LATIMER: Yeah, well, you know, we made some predictions for 2024, and so this sort of falls firmly in the space there. We think that there's going to be some real meaningful appreciation across the whole industry. In October, the overall market cap for digital assets sat at around $1 trillion. It's now about $1.6 trillion. We think by the end of 2025, you'll be sitting at about $2.5 trillion in overall market cap. So if you kind of averaged that across the industry, we think there's another 50% or so upside built into the, you know, pricing of all assets. We think Bitcoin's among them.

What we'll see is that ETF demand that's created there will put a nice floor and support for price movement. We also think there's some optimism around the legislative front. We hope to see some thoughtful legislative action at some point in 2024 as well. That will, again, put some upward pressure.

And then you have Bitcoin halving, which is a technical piece that's happening, I believe, in April. And that traditionally has also put some upward pressure on the price of the asset.