Sep 5, 2023

Digital Assets Council of Financial Professionals founder Ric Edelman shares his price prediction for bitcoin (BTC) as JPMorgan analysts predict the SEC is likely to be forced to approve the spot bitcoin ETF applications from several asset managers, after a federal court ruled that the regulator must review its rejection of Grayscale’s attempt to convert the Grayscale Bitcoin Trust (GBTC) into an ETF.

Video transcript

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. JP Morgan. Analysts predict more likely that the SEC will be forced to approve the spot Bitcoin ETF applications from several asset managers after a federal court ruled that the regulator must review its rejection of grey scales attempt to convert the great scale Bitcoin Trust into an ETF. Joining us now to discuss is the founder of Digital Assets Council of Finance Financial Professionals, Rick Adelman. Welcome to the show. Rick. Great to be with you. Thanks, great to have you here this morning. Now, we've been talking about ETF S uh what, what feels like forever. Um And while we, we've had some developments, it feels like we've had none. So I'm so happy you're here with us this morning to kind of unpack uh what might happen next? Let's talk about your white paper. You recently wrote a white paper called, what you need to know about spot Bitcoin ETF S. Tell us what you think. Uh we need to know what are the important points here. Well, this is uh you know, referring to the, the gray scale lawsuit which uh the SEC lost. This is probably the most bullish signal for crypto in years, but we mustn't get too far ahead of ourselves. Uh Although uh everyone in the crypto community is very excited about the fact that gray scale won the lawsuit, which frankly was widely expected because the S ECs position was absurd. The court did not take the SEC to approve of the spot coin ETF applications. That's not what the court said. The court said that what the SEC did is unreasonable uh was arbitrary and capricious and simply said that it must vacate its prior decision. So what does that leave us? Well, we're all expecting that as a result of the lawsuit, the SEC is going to approve the spot Bitcoin ETF applications gray scales as well as nine other applications that are pending before the SEC. Um But that isn't necessarily what the SEC might do. Gary Gusler still remains very opposed to crypto and he seems to have it in for Bitcoin in particular. Uh And so he may do any one of a number of other things. Uh then he may uh appeal the ruling. He's got 45 days to make that decision. Uh If that happens, we're going to go through months, maybe even years of another legal process. Uh The SEC may uh stall uh as they did this past week. Uh right before the, the holiday uh in the US, we uh had the SEC kick the can on the bit wise applications and several others giving them an extra 240 days to make a decision as to what they're going to do here. Uh Third, the SEC could act yes and say, well, ok, fine. Can't say no to gray scale. Then we're gonna tell gray scale to ref file their application. That won't, that's not an approval that's starting the clock over again. And it could take another six months to a year for that process to go through. And finally the SEC could do something that I think a lot of folks are not really talking about the SCC could take the court literally, Jen, the, the court told the SEC that you, that you can't say yes to futures ETS and no to spot ETS. That's kind of like saying you can eat ketchup, but you can't eat tomatoes. It makes no sense. Futures are derivatives. So how can you say yes to the derivative without saying yes to the underlying asset. And that's why the court said no good. Well, the SEC could take the court literally and say, well, if we can't say no to the spot, we'll also say no to the futures and they could pull the futures ETF s off the market, which is the exact opposite of what anybody would ever suspect the SEC to do. So there's a lot of things the SEC could do that are not equating yes to the spot ETF S. So while there's a lot of optimism and I share the optimism that we're going to see the spot ETF applications approved. Let's not get carried away into thinking that that's the only course of action the SEC may take that last point you brought up. There was one of the most interesting points in your notes as I was going through them. What's the likelihood that the SEC comes back and says actually, this Bitcoin futures ETF is going to be rescinded and not allowed in the US anymore. I think it's really low. It's very rare for the SEC to pull a product off the market, especially when you want a product that has been operating perfectly fine, especially now that it has a massive amount of assets in it. The disruption in the both the crypto and financial communities would be massive, the outcry would be huge. It would clearly be demonstrating that that Gary Gentler is operating in a manner that is not in the best interest of investors, uh or the uh industry. So I find it very unlikely, but Gary Gs has done some pretty dramatic things over the past couple of years that are unsustainable, unsupportable. He's gotten thumped by the courts many times ripple now, gray scale, it's expected he'll lose the coin based lawsuit. Uh And uh so it's unlikely but, you know, look at the ripple lawsuit instead of saying, ok, I lost, I'll do what the court said gentler is appealing the decision. Uh So it's hard to say what he'll do, Rick. I got to get your opinion on this. Bloomberg, senior ETF analyst, Eric Walsh said on the Unchained podcast that exchanges like coin base will suffer when the SEC finally approves a spot. Bitcoin ETF S. Do you agree with that? Yes and no. Uh I certainly see the argument and I think, um, it will reduce coin base's business volume. Um Let's, let's put it this way. The overwhelming majority of investment advisor, we're talking 77% say that they are not investing in crypto. They're not recommending it for their clients without the uh existence of an ETF. So when the ETF comes into the market, those advisers are going to be recommending the ETF, they're not gonna be recommending that their clients open Coinbase accounts. So in that sense, people who are currently going to Coinbase and Gemini and crack in and other platforms to uh obtain their crypto are going to turn to the ETF instead because the ETF is so much easier, so much more convenient, so much more liquid lower in cost. Uh high transparency. This is why ETF S are the favorite investment vehicle on the planet for all of those investment opportunities and benefits. So people who are currently buying crypto in other, more cumbersome, more complicated, more expensive ways are going to abandon those and go to the ETF. That's bad news for exchanges uh like coin base. But on the other hand, let's remember something really important. This new spot, Bitcoin ETF is only Bitcoin. It isn't ether, it isn't solana, it isn't polygon, it isn't anything but Bitcoin. And eventually people are going to remember that portfolio diversification is what really matters. Owning only Bitcoin is not necessarily the end all so long term, this could work out well for, for a coin base, as people realize, oh, I do want to have access to other coins and tokens and I can't get that in this Bitcoin. Ef that would mean that we're using the Bitcoin ETF as a foot in the door. This is your first journey down that rabbit hole and it could actually spell good news for the exchanges as investors look for broader ways to engage in the crypto space. So I agree with this point that in the short run, it may hurt coin base but longer term, I think it legitimizes uh Coinbase existence. Uh On that note, there is a report that came out of Bernstein that said, quote, the crypto ETF opportunity won't stop at just Bitcoin but will extend into multiple crypto assets. We of course have the Ether futures. ETF um on the books right now, waiting for an sec approval or denial. Do you see ETF S kind of spanning into other crypto assets that will as well will ETF S become the norm? There's no question. This is just the very beginning. And that's why this is such an exciting moment, not just for Bitcoin, but for crypto broadly, uh this is gonna be a rising tide scenario. Uh And it's great news across the board for Bitcoin or coins and tokens for the platforms and exchanges for the uh S ma separately managed accounts for the Ira custodians that allow you to buy crypto in your ira. This is great news for everybody everywhere. So, yeah, this is just the beginning and maybe this is why Ginzler has been so reticent to say yes to anything because he, he's opposed to this slippery slope. Uh And while we see it as a RS tide, he sees it as a downward problem. Uh But yeah, I think you're absolutely right. I think Bernstein is right on the money and we're going to see in the future that this will be remembered as the initial uh movement into the market place. And it is by far going to be the only one rick before we go. I have to ask you about a webinar. You did last month. You were reportedly predicted that Bitcoin would be in the neighborhood of 100 and $50,000 by the summer of 2025. Talk to me about what went into that prediction um and what needs to happen for us to get there. It seems like a far shot away from the markets check we did at the beginning of the show. Yeah, when I said that that would represent a five X increase in Bitcoin in only about a two year period does sound ridiculously bullish. Although there are others even more bullish than me. There are a lot of reasons that I offer this. Number one, we are beginning to see a sea change while we've been in the crypto winter for far longer than any of us want. And we've had NASA amounts of fraud and abuse and SCC enforcement actions, many of which have been justified. We are also beginning to see the turnaround of this. We're getting rid of the bad boys of crypto. Those crypto bros need to be gone. Many of them are the few remaining will soon be gone. And we're beginning to see the continued development of the technology, the further integration, the adoption and engagement at the institutional level pension funds and other major institutions, endowments and such all engaging in crypto. We also see the sec losing major lawsuits, ripple unis and now most recently gray scale, we are also seeing that over the next six months, we're going to be facing the next Bitcoin having, which historically has always been extraordinarily bullish for the price of Bitcoin as the number of Bitcoin you earn as a miner gets cut in half. That naturally calls for a price doubling for miners to keep their economic words intact. So all of these things are spelling really good news for crypto uh we're seeing legislation coming out of Congress, we're looking at stable coin adoption on a global basis. So all the signs are pointing really strong. And if history is any guide as a result of the having by the summer of 25 I fully expect we'll see Bitcoin well into the low single digits. And even if I'm wrong and way wrong and Bitcoin merely doubles, show me how any other investment has the potential of doing in the next 18 to 24 months. What crypto is the opportunity of doing? So? It's a very exciting time for crypto. And that's why I wrote my white paper on what's happening with the spot ETF applications. Uh Why I wrote my book, The Truth About crypto and why we offer our certificate program so you can become certified in Blockchain and digital assets, all of that available at DFP dot com. All right, Rick, we're gonna have to leave it there. Thanks so much for joining the show this morning. It was a pleasure chatting any time Jen, that was the founder of Digital Assets Council of Financial Professionals, Rick Adelman. Before we go, we shipped out that coin desk and gray scale are both owned by digital currency group.

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