After convening a roundtable of crypto analysts last month to assess the impact of the Federal Reserve’s hawkish pause decision on cryptos, SA asked a panel of six analysts to ponder the big questions about the state of crypto in 2023 as well as the critical issues that will shape its future.
Kicking off part two of the crypto roundtable, two SA analysts – Logan Kane and John Miller – view Grayscale Bitcoin Trust (OTC:GBTC), which allows investors to gain indirect exposure to bitcoin (BTC-USD) and avoid the inconveniences of physical custody, as the best crypto pick for the next six months.
“I believe Bitcoin is the only game in town for crypto, and that the unique circumstances of GBTC make GBTC the best way to play Bitcoin,” Kane said. Miller shared a similar view, favoring “bitcoin-adjacent names with an angle.”
Asked about their year-end predictions for the price of bitcoin (BTC-USD), most analysts leaned toward betting on a downward trajectory from the current mark of $30.2K as of Friday afternoon, but didn’t rule out an eventual rally.
Clem Chambers, for instance, reckons BTC can hit as low as $13K, “but the most likely answer is $25,000. The way Bitcoin is riding out the regulatory disaster zone, almost any price sub-$100,000 is possible, but I remain a bear sitting out this crazy dance.”
As for the biggest event for the rest of 2023 that will affect investors, “It’s all about the” U.S. Securities and Exchange Commission, Chambers contended, noting the lingering question is whether the regulator wants to “regulate crypto, or kill it.” Amid the fallout from high-profile bankruptcies like crypto exchange FTX and crypto hedge fund Three Arrows Capital, the SEC has ramped up scrutiny of the emerging space, having sued two of the largest crypto exchanges – Binance and Coinbase Global (COIN) – last month for violating securities laws. A victory by the SEC could weigh on crypto adoption in the U.S. as most crypto exchanges likely would not be able to operate in the country.
Similarly, Kennan Mell argued: “The event that would have the largest impact on my crypto investment strategy is a verdict in the SEC’s lawsuits that clarifies which cryptocurrencies are securities. “
Of note, the SEC has long contended that most digital tokens qualify as securities rather than currencies. “If Ethereum (ETH-USD) is ruled a commodity,” Mell added, “I would be comfortable allocating a larger part of my portfolio to Ethereum, as regulatory risk is the biggest issue that I see facing Ethereum today. However, we may not be fortunate enough to get a final verdict on this in 2023.”
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