IronWood, which is a cryptocurrency research company, believe that ETFs or institutional investors could spark the demand for digital currencies needed to boost prices and start the next rally.  They predict the next upward rally of prices could reach $35,000, which is almost double the December 2017 highs.

This rally is expected to arrive by the end of 2018. The sentiment was supported by prominent investor Ari Paul, co-founder of the crypto hedge fund BlockTower.

IronWood CEO Michael Strutton commented that an ETF in cryptocurrencies would provide more legitimacy to the industry. After the SEC approval, IRA, 401(k) and other investment accounts with brokers will finally be able to invest in the Bitcoin market. He talked about the specifics of the trade and predicted that, if ETFs add 24 million investors to the market in the U.S. and 14 million from the rest of the world, it could add over $400 billion to the market capitalization.

He further stated:

“Over the past six months, Bitcoin’s market cap has swung from $326 to $110 billion. Adding $420 billion to the market cap could put Bitcoin price range from $26,000 to $44,000.”

The prediction is fueled by reports that the founders of highly-regulated crypto exchange Gemini, the Winklevoss twins, are looking forward to creating their own ETF in digital assets, called Coin. They have repeatedly tried to bring traditional investment instruments to the crypto market.

Another company SolidX has partnered with VanEck to get approval for an ETF by the SEC. The formers application to start an exchange-traded fund was declined by the regulator last year. VanEck handled over 70 ETFs worth over $45 billion, which could help SolidX in launching a Bitcoin fund.

Ari Paul suggested that institutional investors are interested in digital currencies, but the lack of trusted custodianship could be creating a hurdle for their entry. Moreover, the industry has not created institutional products on a large scale yet. These barriers could be removed by Coinbase, which is looking forward to creating custodian solutions. As soon as digital asset companies are approved as custodians of currencies, institutional investment will start pouring in.

He said:

“Institutional money started trickling into cryptocurrency in mid-2017, but it’s been slower than many expected. That doesn’t mean it’s not coming. There are a lot of pieces that need to come together, one big piece being third party custody. Custody isn’t binary… It takes time for custody solutions to gain trustworthiness. But, I think we’ll have solid third-party custody by September of this year.”

ETFs or Institutional Investors Could Drive Bitcoin to $35,000 was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

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