Why we are facing a “psychological turning point” before Bitcoin

In the markets, the diagnosis seems to be clear. The arrival of digital assets such as bitcoin (BTC) and ether (ETH) to Wall Street through spot ETFs revolutionized the system, with bullish prices for the star cryptocurrency.

This is what he assured Matthew McDermottglobal head of digital assets at Goldman Sachs.

“The bitcoin ETF has obviously been an amazing success” said the financial executive, on stage at the Coindesk Consensus conference in Austin, Texas. And he described the approval of these exchange-traded funds as a “major psychological turning point” for all investors.

The price of bitcoin has seen a sharp rise throughout 2024, rising 60% since the approval of a series of spot bitcoin ETFs in January. It surpassed the $70,000 barrier, reaching its previous all-time peak. Last week, the US Securities and Exchange Commission (SEC) gave the green light to several Ethereum spot ETFs.

In this new scenario, the largest investment fund in the world, BlackRockdecided to venture heavily into digital assets.

With that play, he displaced Grayscale as the issuer of the world’s largest bitcoin fund after its new Bitcoin exchange-traded fund (ETF) (IBIT), surpassed $20 billion, Bloomberg reported.

“That’s enormously powerful,” McDermott noted. “As you get clarity on regulations, more people come in on the sell side and start to show the viability of the on-chain marketplace. “Then you can start developing and leveraging these other asset classes where the value proposition is likely to be great,” he added, as reproduced by Forbes.

In fact, ETFs produced a demand shock and greater reliability in cryptoassets, which correlates with a drop in the perception of risk in acquiring them. The results are visible: more than 1 million bitcoin are already controlled by ETFs.

The scope of the psychological effect

Can the impact of bitcoin on finance be transferred to the community? At least in the United States, signs point to fervor occurring.

The North American electoral campaign between the president Joe Biden and the republican candidate, Donald Trump, It is totally involved in the fight over the regulation of cryptocurrencies. For Forbes, the impact has characteristics of a “seismic change.”

The Democratic Party maintained an ambivalent stance on the issue, amid growing interest in the acquisition of bitcoins and other digital assets.

For his part, Trump had an offensive bet by admitting donations in BTC and other cryptocurrencies from his followers. And he placed the topic as a issue with which he sought to polarize with Biden.

“I will ensure that the future of cryptocurrencies and Bitcoin is made in the United States,” stated the former North American president, in one of his campaign statements.

In parallel, different legislation was approved in the US Congress with bipartisan scope, despite the opposition of the SEC.

The paradigmatic case is the historic approval by the House of Representatives of the Financial Innovation and Technology Act for the 21st Century (FIT21), a law that puts an end to regulatory uncertainty.

There is no doubt that the adoption of BTC by the big players in the financial red circle is modifying the perception of all political actors, who try to represent the feelings of the majorities to obtain the vote of the citizens.

The change in opinion is already beginning to be seen. According to a survey by Digital Currency Group, reported by CriptoNoticias, more than 50% of North American voters expressed their fear that excessive regulation will suffocate the cryptocurrency ecosystem.

Although the United States campaign and the great transformations in the global market are far from the plain of the Latin American population, the trend in the region is favorable.

Argentina Brazil and Mexico They are among the three Latin American countries that appear in the top 20 nations with the highest adoption of bitcoin and cryptocurrencies, according to a Chainalysis report from last year.

Will the psychological wave from the United States reach the Southern Cone and other latitudes? We’ll see.