Digital asset-focused investment firm Pantera Capital believes three major catalysts could spark the next crypto bull run.
In a new blog post, Pantera Capital portfolio manager Cosmo Jiang says names the likelihood of an eventual approval of a spot Bitcoin (BTC) exchange-traded fund (ETF) as one of the most notable catalysts for a new bull run.
Jiang says BlackRock’s filing for a Bitcoin ETF is a signal to other investors that crypto has become a legitimate asset class.
“Most notable are the potential spot Bitcoin ETF approvals. In particular, BlackRock’s filing is a big deal for two reasons. First, as the largest asset manager in the world, BlackRock is subject to intense scrutiny and only makes decisions after careful consideration. BlackRock is choosing to double down on the digital asset industry, even amid the regulatory fog and current market environment.
We see this as a signal to investors that crypto is a legitimate asset class with a sustainable future. Second, we believe an ETF will increase access to and demand for this asset class faster than most would expect. In recent news, the US Court of Appeals ruled in Grayscale’s favor in their lawsuit against the SEC’s denial of their spot Bitcoin ETF application last year. We believe this significantly increases the likelihood that Bitcoin ETF applications from companies like BlackRock, Fidelity and others will be approved, possibly as early as mid-October.”
The second catalyst Jiang mentions is an improving regulatory environment, which he says may be reflected in two major lawsuits against the US Securities and Exchange Commission (SEC) by payments company Ripple and digital asset manager Grayscale.
“Clear regulations are important, not only for the protection of consumers, but also for entrepreneurs who need the right frameworks and guidance to have the confidence to create new applications and unlock innovation.”
The third catalyst mentioned by Pantera’s portfolio manager is the acceleration of blockchain’s scaling capabilities, using two fast-growing Ethereum layer-2s as examples.
“Finally, crypto is in what we call the ‘dial-up to broadband moment.’ We’ve alluded to this before in previous letters about how crypto is at a point that looks a lot like the internet was twenty years ago. Scaling solutions for Ethereum like Arbitrum or Optimism are making huge strides, and we’re seeing an increase in lower-fee transaction speeds and the capabilities that come with them.
Just as we couldn’t imagine the scope of the internet companies that emerged after internet speeds accelerated from dial-up to broadband, we think the same will happen with crypto. In our opinion, we have never seen a proliferation of new use cases arising from this massive improvement in blockchain infrastructure and speed.”
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Featured image: Shutterstock/issaro prakalung