Thomas Lee, the co-founder of Fundstrat, sheds light on his opinion regarding the talks surrounding the possibility of a Bitcoin ETF. In a recent interview, Lee stated that a BTC ETF might be years away. Defiantly, he claimed that Bitcoin’s price demanded to be $150,000 to be liquid enough for an ETF, even to be possible.
Lee outlined two significant reasons why one should not expect an ETF in the nearing future. Firstly, Bitcoin is currently valued at under $200B, which is far too small for an ETF. An ETF would form a ‘massive demand imbalance‘ relative to supply, which would be unfeasible at this current market capitalization. Secondly, The SEC today does not want their legacy linked with a Bitcoin ETF. The current chairman of the regulatory body is only going to keep kicking the can down the road.
According to Lee, the equilibrium price needed for adequate liquidity for a Bitcoin ETF would put the leading cryptocurrency at around the $150,000 price point. The founder says that we are many years away from this being realized. Precisely put, Bitcoin is far too small for the SEC to take a risk with approving an ETF, and the demand would also not be sustainable at current liquidity levels.
Words of ETF wisdom from @fundstrat.
We’re still only playing in a puddle and an ETF requires at least a lake. https://t.co/Zbre2mz4nn
— Bryce Weiner (@BryceWeiner) October 22, 2019