Why it may be different this time
Bullish cryptocurrency sentiment is rising as bitcoin (BTC-USD) surpassed over $43,000 Tuesday afternoon, making an over 150% gain this year. However, due to the historic volatility of the asset, some investors remain cautious, but do they need to be? Devin Ryan, Citizens JMP Securities Director of Financial Technology Research and Head of Business Development, joins Yahoo Finance to discuss the current state of crypto, investor sentiment for crypto, and why it may finally stabilize.
Ryan explains why crypto is positioned to be taken more seriously than it was in the past: “I think we’ve been through a lot in the space over the past couple of years, whether it’s FTX, or even some of the more recent regulatory issues that this space has dealt with. On one hand you absolutely have I think some of the hype, on the other hand you have $20 trillion dollars of really legitimate institutional asset managers sponsoring an ETF to actually bring crypto to the masses.”
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Video Transcript
– At the same time, along with the price surge, we’ve had the re-emergence of some of the hype men, if you will, or shills to put it. another way, of crypto more broadly and Bitcoin more specifically. And an almost quasi religious tone sometimes when you’re talking about this stuff. Are investors more wary of that than they once were because now they’ve been through a painful cycle?
DEVIN RYAN: It’s a great question. I think that we’ve been through a lot in the space over the past couple of years, whether it’s FTX or even some of the more recent regulatory issues that this space has dealt with. So on one hand, you absolutely have I think some of the hype.
On the other hand, you have $20 trillion of really legitimate institutional asset managers sponsoring an ETF to actually bring crypto to the masses. And so I think you have to look at it through both lenses. On one hand, there are people that are just looking at price. On the other hand, I think there are asset managers that are very bullish here, and that’s a pretty big indication of I think where we’re going.
– Do you think the approvals are going to come in January, and do you think at that point they’re actually because, we’ve seen all of this rallying in anticipation, that there actually could be a pullback at that point?
DEVIN RYAN: Yeah. So I do think they’re going to come in January just based on following the path of what’s happened over the past couple of months here. In terms of the price action, you think about there’s a multiplier effect on capital. And so what’s happening right now is people are, the enthusiasm is there, people are getting a little bit ahead of the ETFs, but the ETFs you think about $20 trillion of just the asset managers that are sponsoring the ETFs today.
A very small fraction of capital of those asset managers do think about an asset allocation strategy for private client, for example, that could be tens of billions of dollars. And I’ve seen a lot of estimates $10 billion could mean hundreds of billions, if not trillions of dollars of market cap expansion. So that multiplier effect is important. Short term, yes, there could be some volatility, sell the news around that, but I think the long-term direction here is probably continue to move higher.