Crypto Adoption Raging Ahead Despite Recent Price Lull

After plunging to new lows in 2022, Bitcoin's value has jumped over three-fold since the start of last year, largely thanks to the launch of spot Bitcoin exchange-traded funds in January this year. What this has done is push cryptos into mainstream investing.

BTC Price Anxiety

2024's rally pushed the top token to a new record high in mid-March, reaching $73,798. Bitcoin's price has since slipped below $70K, struggling to re-enter the level.

Nonetheless, Bitcoin's price could see more upside. brn analysts highlight, "Bitcoin’s profit margin is down to 3% and the selling pressure came down after last week’s pump. We expect it to break the 70K barrier in the upcoming weeks where it will keep consolidating while facing strong resistance at ATH level."

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Indeed, following new ETFs devoted to the asset class, new funds concentrating on cryptocurrency strategies are springing up much quicker as market excitement surges again.

According to Crypto Fund Research, 25 new venture capital and hedge funds were formed in the first quarter of the year, the highest number since the second quarter of 2021.

That's twice as many as closed during that time and nearly three times as much as the nine funds that surfaced in Q1 2023.

Institutions Love Crypto

According to CCData, as the market recovers, new competitors will be able to take advantage of the openings created by the bankruptcy.

The funds that made it through the so-called 'crypto winter,' the many bankruptcies and controversies, have been producing returns in the double- and triple-digit percentage range recently.

Since October 2022, when it hit $16.3 billion, the overall crypto-dedicated hedge-fund market has increased to $21 billion, according to tracker Galaxy VisionTrack.

However, the current rate of new fund releases is significantly lower compared to the overall number of crypto funds, which more than doubled in 2017 (73 new funds were released each quarter), according to Crypto Fund Research.

Fewer investors are entering the venture capital industry this year compared to 2021 and 2022, which means new fundraising is often lower.

According to VisionTrack, there were 631 venture capital agreements in the first quarter, with a total investment of only $2.62 billion.

Compared to the same time last year, when $2.9 billion was spent across 781 projects, and the first quarter of 2021, when $7.2 billion was invested across 817 agreements, according to VisionTrack, this is a significant decrease.

Ethereum ETF Approval, A Boon?

Besides Bitcoin ETFs, the US regulatory shift towards enabling exchange-traded funds for Ether has also boosted crypto investments.

Wagers on Ether gains have grown after the US paved the way for Ether ETFs.

In the seven days leading up to Sunday, the second-largest coin saw a 26% jump—the highest weekly rise since the crypto bull market of 2021—caused by the move by the US SEC.

That comes despite doubts over the products' demand strength, as Bitcoin ETF flows have since slowed and the demand in international markets like Hong Kong has yet to take off.

Not long ago, we would have said it couldn't happen, but we still have a lot of questions:

The vote was divided. The BTC spot ETFs passed with a vote of 3-2, with Chair Gensler personally abstaining.

Given that the division director was given the authority to cast the ballots, it is quite improbable that we will receive such information.

What a stroke of luck! The approval covers only the 19b-4s, the exchanges' proposed rule change.

Waiting on the SEC Again

Now, issuers must wait for the SEC to approve the S-1s and the registration paperwork they filed. Days, weeks, or months may pass.

We could observe further requests for cosmetic adjustments, but overall, approval is probable.

The SEC does not classify unstaked Ethereum as a security. Rather than filing S-1s, funds whose primary asset class is securities are required to file N-2s or N-1As.

In the United States, governmental animosity towards cryptocurrency is beginning to melt.

What matters most are the two factors mentioned above.

It's not the money that will most likely pour into the new items; earlier this week, we predicted that would be a letdown.

On the contrary, it's a formal confirmation that Ethereum is now a liquid and transparent "commodity" investment asset that institutions and individuals may use.

It also indicates that Ethereum developers may safely handle ETH without breaking securities rules.

As a bonus, it sends a strong message to other countries that the United States is beginning to understand that the cryptocurrency sector is intriguing, growing, and significant enough for government attention.

Currently, only accredited investors will be allowed to purchase Bitcoin and Ethereum ETNs, but next Tuesday, the London Stock Exchange will list them, making it a first for the UK.

Politicians have now come to terms with the fact that people value respect and choice above stifling them for security, proving that the crypto lobby is powerful and formidable.