Why does the “Bull Queen” love Bitcoin? Can it reach the $500,000 mark?

As a loyal supporter of Bitcoin, Cathie Wood, who has the title of “Bull Queen” (“Wood Sister”), has indeed persisted. Right now, the cryptocurrency led by Bitcoin is like a rat crossing the street. It is a thorn in the eyes of global regulators, and it also makes investors complain. “Sister Mu” didn’t care at all. Not only did she take the opportunity to buy the bottom, she also targeted the Bitcoin ETF, and she was ready to give it a go. It’s just that I don’t know how far Bitcoin is from the $500,000 in her heart.

Bitcoin has been in a low ebb for a long time, but there are still diehard fans who believe that they can keep things clear. On Monday, June 28, local time, Ark Invest, a subsidiary of “Mu Mu Jie”, submitted an application document to the U.S. Securities and Exchange Commission (SEC) to set up a Bitcoin ETF fund (that is, a fund listed and traded on the stock exchange). ).

According to the documents submitted by Ark Invest to the SEC, the investment objective of this ETF is mainly to track the value of Bitcoin. If approved, the fund will be traded on the Chicago Board Options Exchange (CBOE) BZX exchange under the symbol “ARKB”.

Ark Invest will cooperate with 21Shares to launch this ETF. 21Shares is the fourth largest cryptocurrency product issuer, and “Mu Mu Jie” is also a member of its board of directors. The documents show that 21Shares is the originator of the ETF, and Ark Invest will support the marketing of ETF stocks, and it is expected that Coinbase will keep the directly purchased bitcoins.

This move of “Mu Mu Jie” is not unexpected. After all, her bullish attitude towards Bitcoin has always been obvious. Last Tuesday, Ark Invest’s flagship fund, the Innovation ETF (ARKK), purchased another 214,718 shares of Coinbase, which is the world’s largest digital currency exchange. After the increase in holdings, Ark Invest’s total holdings in Coinbase reached 4.7 million shares. If calculated at the closing price of the day, the value of Coinbase held by “Mu Mu Jie” is more than 1.04 billion U.S. dollars.

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This does not stop there. On the same day that it increased its holdings of Coinbase, Ark Invest’s Next Generation Internet ETF (ARKW) also increased its holdings of an additional 1 million shares of Grayscale Bitcoin Trust (GBTC), valued at approximately US$29.3 million, the latter being the world’s largest Bitcoin Trust. At present, ARKW is the largest ETF holding Grayscale Bitcoin Trust in the market, holding a total of 8.5 million shares, worth close to 239 million US dollars.

“I still think that the price of Bitcoin will reach 500,000 US dollars per coin. Bitcoin is currently experiencing a short run, but it is not necessarily at the bottom. The market at this stage is very emotional.” In an earlier interview, “Sister Mu” still insisted on her own. view.

In the view of “Mu Mujie”, Bitcoin will become part of a balanced investment portfolio in the future. It is estimated that if 1% of the cash of each company in the S&P 500 index is converted into Bitcoin, the price of Bitcoin will rise by more than $40,000 from current levels. If Bitcoin’s cash level in each company increases to 10%, the price of Bitcoin will rise by more than $400,000.

The greed of “Mu Mu Jie” bucked the trend, and it was no surprise to the “Mu Mu Jie” who didn’t take the usual path. Relying on bets on high-growth technology and innovation stocks, the fund ARKK under the “Sister Mu” performed brilliantly last year, with a yield of 153%, making it the best performing fund last year.

In particular, the investment in Tesla made “Sister Mu” famous in the first battle, and was nicknamed “Female Buffett” and “Bull Queen” by the outside world. About 5 years ago, ARK began to invest in Tesla. From 2016 to 2018, Tesla was questioned by the market, but “Mu Mu Jie” continued to increase its holdings. For the past 3 years, Tesla has been the largest holding of the fund.

Since last year, Tesla’s surge has also made “Mu Mu Jie” a lot of money. Even in April of this year, when Tesla fell sharply again, “Sister Mu” took the opportunity to buy bottoms and bought 47,031 shares of Tesla, valued at US$27.2 million after falling 15%.

“Others fear me and I am greedy”. This famous Buffett’s saying is not against “Mu Mu Jie”. While increasing Tesla’s holdings, Mu Jie also advocated setting its latest target price at a high of $4,000, which is higher than Tesla’s target price of $3,000 per share by 2025, which was set two months ago.

Interestingly, while optimistic about Tesla, “Sister Mu” and Tesla CEO Elon Musk have similar attitudes towards Bitcoin. In mid-May, Bitcoin stepped into a downward channel, and “blood flowed into a river” for a while. “Sister Mu” still chanted: “Bitcoin will still rise to 500,000 US dollars!”

“Forty years, now I have finally seen the beginning of a shift in asset allocation, shifting from fixed income to stocks, real estate and other assets including Bitcoin.” At the beginning of this year, “Mu Mu” emphasized that he is very interested in U.S. stocks and Bitcoin. The currency’s mentality is too much.

Even though Ms. Mu Mu repeatedly emphasized his confidence in Bitcoin, the current regulatory pressure on Bitcoin is obvious. Last week, the British financial regulator has banned Binance from operating in the UK, joining the ranks of Canada and Japan, becoming the third largest market for attacking the cryptocurrency exchange.

More than that, earlier this month, the Basel Committee on Banking Supervision proposed to list cryptocurrency as the highest risk category in bank capital and increase its risk weight to 1250%. Banks must reserve a full amount of risk reserves for cryptocurrency exposure, that is, to hold 1 U.S. dollar worth of cryptocurrency, they also need to hold 1 U.S. dollar of capital.

Obviously, this proposal increases the cost of holding digital currencies for banks and becomes an obstacle to the further widespread application of encrypted currencies.

Under the regulatory wave, the price of Bitcoin fluctuates significantly. According to data from Bitcoin Homes, as of 18:00 on June 29, Beijing time, the price of Bitcoin was reported at US$35,237, a slight rebound from the previous period. It rose by 12% within a week, but it was higher than the nearly US$64,000 more than two months ago. Points, has fallen by more than 40%.

Affected by the fluctuations in the price of Bitcoin, Coinbase, which “Mu Mu Jie” bought heavily in May, has fallen by 10% since it went public in April.

SEC’s hesitation

Judging from the “Musu Mu sister” application for the establishment of a Bitcoin ETF, it is clear that this round of Bitcoin’s plunge did not hinder her “greed”, but this does not mean that the SEC can also understand this “greed”.

In fact, the SEC had already received a lot of Bitcoin ETF applications before “Musu Mu”. However, the SEC not only did not nod, it has repeatedly postponed its decision to allow the first Bitcoin ETF to be listed and traded.

In January of this year, Valkyrie submitted an application to the SEC to list a Bitcoin ETF on the New York Stock Exchange; then in February and March, Stone Ridge Assert Management’s subsidiary NYDIG, Fidelity Investment’s subsidiary FD Funds Management and VanEck Both submitted applications for Bitcoin ETFs.

It’s just that the SEC keeps performing “dragging words” on this topic. In April, the SEC extended the 45-day approval period for VanEck’s application to 90 days. In June, the SEC extended the review window for the Valkyrie Bitcoin ETF by 45 days to August 10, because it would take more time.

In contrast, Canada is much more radical. Since the first in February, Canada has approved 4 institutions to list Bitcoin ETFs on the Toronto Stock Exchange. In June, the Bitcoin ETF of QR Capital, a blockchain investment company, was successfully traded on the Brazilian Stock Exchange. On the same day, the Dubai Nasdaq exchange also approved bitcoin fund transactions.

According to Su Xiaorui, a financial technology expert, Bitcoin ETF can lower the investment threshold of virtual currency-related assets to a certain extent, and on the other hand, it can also enrich the investment types of Bitcoin-related assets.

“But the SEC has been delaying the approval of Bitcoin ETFs. Just as it is concerned about the risk of Bitcoin itself, the volatility of Bitcoin’s price makes it difficult for outsiders to make a reasonable valuation, and because Bitcoin has extremely high speculative properties, the bottom layer may also be Causes the risk of market manipulation.” Su Xiaorui pointed out.

Indeed, SEC Chairman Gary Gensler once said that the supervision of cryptocurrency exchange platforms should be strengthened to enhance investor protection. It was also emphasized that the SEC needs to fill the gaps in the legal protection of cryptocurrency investors and improve the cryptocurrency regulatory system before approving applications for Bitcoin ETFs such as Fidelity, WisdomTree, VanEck, etc.

Also Read:  No Cash, No Card : Is this the age of Bitcoin?
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