Crypto in focus: Bitcoin, Ethereum on track for their worst quarter in 4 years

The world of cryptocurrency is facing a tumultuous period as trading volumes for the two largest digital assets, Bitcoin and Ethereum, are on track for their worst quarter in four years. The recent market trends are raising questions and eyebrows among investors and analysts alike. To shed light on the situation, CNBC Africa sat down with Rob Price, Founder & CIO of Sound Money, for an in-depth discussion on the current state of the crypto market and what the future holds for digital assets. Bitcoin, the pioneer of cryptocurrencies, has seen a significant dip of almost 11% in the past month, with its current price hovering around $26,038 against the US dollar. Price attributes this downturn to the inherent cyclicality of Bitcoin as an asset class. He explains that after a weak performance in 2022, the market witnessed a strong rally earlier this year. However, Price highlights that every four years, Bitcoin experiences a bear market phase, which was evident in 2022. In contrast, 2023 has been a post-bear market year, with Bitcoin registering gains of over 60%. Despite the recovery, institutional investors have been cautious in entering the market, with lingering concerns stemming from past incidents like the FTX debacle. Price emphasizes that the awaited BlackRock spot Bitcoin ETF could serve as a potential catalyst to attract institutional capital into the crypto space. The conversation then shifted to the topic of institutional investments and the US government's recent delay in approving the first US exchange-traded funds directly linked to cryptocurrencies. Price elaborated on the significance of such approval, highlighting the inefficiencies of current futures-based ETFs compared to spot Bitcoin ETFs. He noted that a spot ETF would offer a more efficient gateway for investors to access the crypto market, thereby potentially boosting participation from a broader investor base. Although the approval process has faced setbacks due to regulatory skepticism, Price remains optimistic about the long-term prospects of the crypto market. He points out that major players like BlackRock and PayPal's foray into the crypto ecosystem signal a growing recognition of the underlying value of digital assets among institutional investors. Price predicts that an ETF approval could materialize within the next 12 to 18 months, albeit contingent on evolving regulatory dynamics within the SEC. In conclusion, the crypto landscape continues to evolve amidst regulatory uncertainties and market fluctuations. The resurgence of Bitcoin and Ethereum from the lows of the previous year underscores the resilience of digital assets as an emerging asset class. As the industry awaits key developments such as the Bitcoin halving and the approval of spot Bitcoin ETFs, the future trajectory of cryptocurrencies remains a subject of intense speculation and anticipation. Investors and market observers will closely monitor regulatory decisions and institutional actions to gauge the sustainability and growth potential of the crypto market.