The U.S. Securities and Exchange Commission (SEC) would consider a Bitcoin exchange-traded fund (ETF) only if Bitcoin’s market cap reached $2 trillion
Cathie Wood, CEO of ARK Investment Management, said it is unlikely the SEC will approve a Bitcoin ETF while the cryptocurrency’s market capitalization remains below $2 trillion. She made this remark while speaking at the ETF Trends Big Ideas event on Tuesday.
According to Wood, the SEC needs to see a significant level of market demand and maturity before feeling comfortable approving a Bitcoin ETF. The crypto industry has been pushing for approval of a Bitcoin ETF for years.
Despite several proposals from firms such as VanEck and others, the SEC has not yet approved a Bitcoin ETF. At the time of Wood’s comments, Bitcoin’s market cap sat roughly $8 billion under $600 billion. Based on Wood’s analysis, the Bitcoin market would need to roughly triple from that level before the SEC might seriously consider an ETF—reaching around a $2 trillion market capitalization.
Wood also suggested she might be more optimistic about ETF approval if Gary Gensler, a former CFTC commissioner and MIT lecturer on digital currencies, were confirmed as SEC chair. President Joe Biden nominated Gensler for the role, and Wood believes his pro-crypto understanding could help the industry secure the long-awaited ETF approval.
If confirmed, Gensler would be one of the most crypto-savvy SEC chairs to date. However, he has emphasized that while he sees promise in Bitcoin, he places even greater emphasis on blockchain technology and smart contracts.
Wood is very bullish on Bitcoin’s price
Cathie Wood also shared bold projections for Bitcoin’s price and adoption. Citing MicroStrategy’s strategy as an example, she argued that if every company in the S&P 500 allocated just 1% of its assets to Bitcoin, the additional demand could raise Bitcoin’s price by roughly $40,000 from current levels.
Wood further estimated that if institutional investors allocated between 2.5% and 6.5% of their portfolios to Bitcoin, the cryptocurrency’s price could climb into a range between $200,000 and $500,000. Bitcoin surged more than 400% last year and began 2021 strongly after reaching a new all-time high near $42,000. Since then, momentum has cooled and Bitcoin is trading above the $32,000 level on most exchanges.