Bitcoin Trillion Dollar Market Cap: What’s Keeping BTC From $1 Trillion Milestone?
Though 2018 has been an incredibly tough year for cryptocurrencies, there are several reasons that investors ought to remain optimistic moving forward. For one, Bitcoin seems more than a little bit likely to win the support of the SEC for the creation of a Bitcoin ETF. This ETF would result in even more of the institutional, Wall Street support that Bitcoin and its altcoin markets so desperately needs for further mass adoption.
But despite this possibility, the price of Bitcoin has still fallen an unprecedented amount. Following the consistent Bitcoin maxim of “one step forward and two steps back,” the cryptocurrency fell from an all-time high of over $20,000 last December to the low of 2018, $5,893. Currently, the price hovers around the $6,000 support level, slowly creeping down as time goes by. While the value occasionally spikes, it is almost always corrected within the next week, slow to recover anywhere near the previous values of 2017 which garnered worldwide attention.
The Bitcoin ETF could be exactly what the market needs in order to permanently recover, or maybe even to hit a new all-time high. The evidence for this proposition is historical in nature; trends in the history of the price of gold show that when the commodity was given an ETF in the United States by the SEC, its price skyrocketed and it became a commonplace way to store money in rough economic times. For Bitcoin a similar price change could be in the very new future.
An ETF is incredibly important to the cryptocurrency markets for several reasons. An ETF is an Exchange-Traded Fund. When someone wants to invest in Bitcoin in the status quo, they have to find a way to acquire the currency, holding it themselves in a wallet or on an exchange in order to speculate on the price.
This is comparable to the process that once garnered investment in gold. In order to properly speculate on the price of the precious metal, someone would need to physically hold however much of the gold they wanted to invest in. This became tedious; holding $50,000 in gold bars is an impractical way to invest. To respond to the problem, ETFs for gold were created.
A Bitcoin ETF allows an investor to invest in a commodity without physically holding it themselves. In theory, the investment is like an IOU, where the investor speculates on the price of a commodity, but does not physically have the commodity themselves. For Bitcoin, this is a major deal. Many investors crave more security on the market, because threats are common and security is relatively problematic.
Market Cap Increase
Market professionals speculate that, although it might be some time before one of the many Bitcoin ETF applications are approved by the Securities and Exchanges Commission, the approval will be the first step in a long process that will eventually lead to an explosive increase in Bitcoin market volume.
The market volume increase comes before a spike in the overall price of Bitcoin. According to leading market speculators, the Bitcoin market increase and subsequent price climb will result from the entrance of new, bigger monies to the market.