Indeed, Wall Street’s already starting to whisper about Bitcoin going to $100,000. Exchange traded funds are the shiny new toy and everyone is patting themselves on the back for finally “figuring out” crypto. Let’s be honest, are they actually getting a complete picture? I'm not so sure. Here’s what they’re getting wrong, and why you need to listen.
ETF Euphoria Masks Deeper Issues
ETFs are great for accessibility. Now retail investors can jump in without having to learn about private keys or cold storage. Institutions can allocate without the compliance headache. This seemingly practical access is the most lethal close call. It mischaracterizes Bitcoin as a classic stock, operating under the same market dynamics and emotional herd behavior.
Think about it. Wall Street loves to package things. Mortgages became CDOs, now look what happened. Are we sure that turning Bitcoin into a wrapped asset really is the key to its full potential? Or does it just open us up to those same systemic risks? The herd mentality the ETFs promote and exacerbate can cause violent sell-offs on negative headlines or fear, rather than fundamentals. It’s like putting a Ferrari engine in a bumper car—all that speed, but not enough steering.
Halving Hype Oversimplifies Supply Shock
Indeed, the Bitcoin halving cuts in half the rate of new Bitcoin created and introduced into circulation. Ec 101, limited supply + same amount of demand = increased cost. The reality is far more nuanced. The market knows the halving is coming. It's priced in, to some extent.
The only question remaining is, how much of the new demand is going to show up? Will the ETFs generate enough new, additional capital to make up for the potential selling pressure from miners who need to adjust to a reality of lower rewards? Remember, miners are businesses. In particular, they have an incentive to regularly sell Bitcoin in order to pay their operating costs. A much smaller reward will push at least some of these smaller miners to turn off. Besides endangering network security, such a shutdown could start an unwanted feedback loop. Because talent isn’t just about scarcity, it’s about the entire talent ecosystem.
Regulatory Roulette: A Looming Black Swan
Wall Street analysts build models. Instead, they often project future growth based on historical data and current trends. What they overlook is that Bitcoin doesn’t live in a vacuum, politically speaking.
Picture this—one of the largest governments in the world decides to ban Bitcoin mining overnight, or enacts a severe capital gains tax on all crypto transactions. This isn't some far-fetched conspiracy theory. China did it. Others could follow. This much more severe impact on price would be catastrophic, no matter how many ETFs have launched and are trading.
The regulatory risk Tying too many assumptions to this regulatory risk is the X factor that no spreadsheet can ever truly calculate. Wall Street’s over-dependence on static established financial models that do not account for shifting geopolitical realities has them perilously at risk.
Bitcoin's "Digital Gold" Narrative Is Flawed
The "digital gold" narrative is catchy. It continues to paint Bitcoin as a safe haven asset, a hedge against inflation and economic uncertainty. Unfortunately, Bitcoin’s price volatility has other ideas. Gold doesn't swing 10% in a day.
The impact of Bitcoin’s correlation with traditional safe havens, such as gold, has been erratic at best. Historically, during genuine economic crises, investors flee to safety. During crisis times, investors move to the safety of the dollar, U.S. Treasury bonds, and physical gold. Bitcoin continues to primarily be perceived as a risk-on asset. This causes it to very frequently move in tandem with the stock market. Wall Street wishes it could be digital gold, but the market hasn’t completely gone along with that narrative just yet.
Altcoin Apocalypse: A Diversification Dilemma
Bitcoin might be king, but the crypto kingdom is large and full of hungry upstarts looking to take that crown. Wall Street’s laser focus on Bitcoin usually makes them superphobic altcoins.
Although Bitcoin dominance remains steadfast, history would suggest that during speculative cycles, capital shifts to Altcoins offering quicker returns. This can draw capital away from Bitcoin, pushing back the day we see Bitcoin cross $100,000. But even more important is the fact that there are so many altcoins that it’s a highly competitive landscape. A breakthrough technology or a more efficient blockchain may come along to dethrone Bitcoin, making the $100,000 target moot. Wall Street should stop focusing on the BTC ticker and start thinking about the overall crypto ecosystem.
Bitcoin could hit $100,000. The ETFs could drive significant demand. The halving could create a supply shock. These are just probabilities, not guarantees. Put simply, Wall Street has to remove the rose-colored glasses and face reality on the risks before blindly pursuing the $100,000 fantasy.
Bitcoin could hit $100,000. The ETFs could drive significant demand. The halving could create a supply shock. But these are just probabilities, not guarantees. Wall Street needs to ditch the rose-tinted glasses and acknowledge the real risks before blindly chasing the $100,000 dream.
