Michael Saylor, co-founder and executive chairman of business intelligence company MicroStrategy (MSTR), has predicted a potential demand shock for Bitcoin in 2024.
According to Saylor, the demand shock will occur if the U.S. Securities and Exchange Commission (SEC) approves spot Bitcoin ETFs in January 2024.
As a prominent advocate for Bitcoin adoption, SEC’s approval of the spot ETF will be Bitcoin’s potential game-changer. Saylor has predicted a surge in demand and higher prices due to increased demand and reduced supply.
Microstrategy Co-founder Michael Saylor says Bitcoin will go on a bull run in 2024, and the approval of a spot-Bitcoin ETF could be the biggest development on Wall Street in 30 years.
— Bloomberg Crypto (@crypto) December 19, 2023
Concurrently, he is also anticipating a supply shock coinciding with the Bitcoin Halving event scheduled for the second quarter of 2024. The MicroStrategy founder has previously addressed the importance of the impending spot Bitcoin ETFs in a Tuesday appearance on Bloomberg TV.
“It’s not unreasonable to suggest that this might be the biggest development on Wall Street in 30 years,” Saylor said.
Saylor said they anticipate 2024 to be a significant bull run for the asset class. At this point, the extent of the asset’s potential run remains uncertain. He also emphasized that mainstream investors, whether individual or institutional, have lacked a “high bandwidth” compliant channel for investing in bitcoin. He anticipates a significant shift with the introduction of the spot ETF.
According to Saylor, this new vehicle will generate a demand shock for Bitcoin, soon followed by a supply shock during April’s halving event. During this event, daily bitcoin production will reduce from the current 900 to just 450.
“I think in January, the approval of the spot ETFs is going to be a major catalyst. It’s going to definitely drive a demand shock, and then that will be followed in April with a supply shock because there are about 900 BTC available a day for sale by natural sellers, the miners, and that number is going to be cut to 450 BTC a day in April, so it’s a pretty big deal,” he said.
Addressing the frequently asked question about whether an actual spot ETF might divert investor demand from MicroStrategy—often seen as a bitcoin ETF proxy—Saylor clarified that MSTR is an operating company capable of using its cash flow or “intelligent leverage” to enhance its bitcoin holdings. He also highlighted that, unlike ETFs, no fee is associated with owning MSTR.
Saylor also drew parallels between spot ETF approval and the introduction of S&P 500 index funds in the stock market. He suggested that these converging factors can potentially augment the cryptocurrency’s value and scarcity.
MicroStrategy, currently the largest institutional holder of Bitcoin, commenced its cryptocurrency accumulation in August 2020. The company has amassed a substantial holding of 158,400 Bitcoin so far. With this position, the company wields influence within the crypto community.
Bitcoin’s resilience in 2023
In 2023, Bitcoin displayed resilience despite challenges, including legal issues surrounding Binance and the conviction of FTX’s Sam Bankman-Fried.
Following a $1.5 trillion depreciation the previous year, Bitcoin’s market cap surged by 160 percent, marking a substantial increase of $530 billion. Investor optimism, particularly regarding potential regulatory approval for the first Bitcoin-focused ETF, played a pivotal role in this rapid rally.
As of now, Bitcoin’s price has risen by approximately 13 percent in the past month. The period leading up to the SEC’s decision on the January deadline remains uncertain, with analysts estimating a high probability (98 percent) of approval. Ongoing discussions between financial giant Blackrock and SEC officials hint at a favorable outcome.
Looking ahead to 2024, Saylor’s prediction of a demand shock for Bitcoin, driven by spot ETF approval, piques the anticipation of many traders in the community. With MicroStrategy’s substantial Bitcoin holdings and Saylor’s influence, the community closely monitors developments leading up to the SEC’s decision on January 10, 2024.