Bitcoin ETF Approved - What's Next?
246: New Age Of Digital Assets, Iran, DEI
Good morning everyone. If you’re a life-long subscriber what’s up king — if you’re a new subscriber welcome.
Happy Friday.
One of those weeks that felt particularly long — and I don’t say that often.
If you guys missed the last couple deep dives you can find them below — this week I touched on 10 Items Every Man Should Own in 2024:
Quite a bit has transpired this week in global news and markets but let’s start with a thorough review of financial markets with a focus on the event capturing the bulk of attention this week — the Bitcoin ETF Approval. In other news Jewish secret tunnels were found in New York City, Hunter Biden and his lawyers walked out of a congressional hearing on his contempt of congress, and Elon Musk and Mark Cuban got into a vicious war on Twitter about DEI.
It’s only the 10th day of 2024 and things are already crazy.
Let’s talk about what comes next and how to position yourself to benefit in the coming months. Congratulations to all my hodlers and crypto bros — this is a massive step towards the future of finance and digital assets.
Bitcoin ETF Approval
The biggest news on Wall Street this week is the long awaited approval of the various Bitcoin ETF’s by the SEC. This long awaited decision has been delayed, kicked around, and drawn out for some time now but it appears that the SEC was under a good deal of pressure to provide regulatory clarity in the space AND facilitate the on ramps for customer’s of large insitutions to “safely” get into the space.
Approval has been granted for the following applicants:
Invesco Galaxy Bitcoin ETF - BTCO
Fidelity Wise Origin Bitcoin Fund - FBTC
VanEck Bitcoin Trust - HODL
Franklin Bitcoin ETF - EZBC
ARK 21Shares Bitcoin ETF - ARKB
Wisdom Tree ETF - BTCW
Valkyrie ETF - BRRR
iShares ETF - IBIT
Hashdex ETF - DEFI
Grayscale ETF - GBTC
Bitwise ETF - BTB
So what does this approval mean and where can we expect price to go in the short term for Bitcoin, Ethereum, and other crypto assets?
If you read Arb Letter pieces on crypto (and you should given we are the #3 crypto publication on Substack) you have the basics down pat and you likely profited from this approval. I called the Ethereum pump we are watching and I called the general pump we are watching begin today in Bitcoin and alts. I don’t like to outwardly shill the paid posts or “calls” I make or put out — but the truth is we’ve been consistently accurate re: crypto over a long time period. BowTied Bull has been as well.
Easy straightforward alpha folks — all for the cost of a Starbucks coffee each month.
If you’re interested in ongoing crypto deep dives consider upgrading to premium. This is where I will get into specifics on expectations, assets I am looking at, and trends all investors need to keep an eye on this year in crypto.
Just have to put in the time and ignore the noise.
Today we’ll cover what to expect in 2024 and then we will move on to cover the most important global news updates of the week.
The process saw a slight hiccup on Tuesday when the SEC official Twitter tweeted out that the ETFs had been approved. Twitter and media sites went wild spreading the news quickly causing a rapid ascent in price — unfortunately only minutes later the SEC tweeted again saying that their account had been compromised and price quickly fell.
This isn’t the first time that this process saw an unexpected twist — roughly a month ago an intern at falsely claimed ETFs had been approved.
Trading of ETFs kicked off yesterday morning and saw inflows of nearly $2.3B within an hour. This is absolutely mind blowing and shows the pent up demand on Wall Street for Bitcoin products.
Many popular crypto influencers and figures shilled the narrative that this event was going to be a “sell the news” event — which has proven to be completely wrong in early hours of trading — sure we’re getting a slight pullback but volatility should be expected on a day where so many large players are getting into the market and some existing players are likely taking profits.
The issue I take with the “sell the news” approach is that if you understand Bitcoin you really have no desire to sell anytime soon. The majority of holders haven’t touched their Bitcoin in years and have it safe off of exchanges. These individuals are not going to sell at $50K, $60K, $70K or $80K — they are going to hold for a long period of time to see their profits get supercharged.
As a general rule of thumb — 99% of people should not be trying this cute short term trading when it comes to crypto. There is a very small amount of seasoned traders who have the discipline and experience to do so profitably.
Buy and hold. It’s really that simple.
It’s a great example of an instance when you need to ignore the masses and noise.
These approvals are monumental for the crypto space for several reasons:
Traditional financial institutions, formerly against Bitcoin and crypto are now intertwined in digital asset markets
Institutional capital will flow into Bitcoin now ahead of the halvening in April
This paves the way for other ETFs in including an Ethereum one sometime this year — including alts down the line
This acceptance could sway political views on crypto in DC since the majority of their financial backers are now involved in the space
I expect it to be awhile before the dust officially settles. Curiously Vanguard and several others have refused to offer BTC ETFs to clients on their accounts and brokerages. They issued a statement saying:
“Spot Bitcoin ETFs will not be available for purchase on the Vanguard platform…. Our perspective is that these products do not align with our offer focused on asset classes such as equities, bonds, and cash which Vanguard views as the building blocks of a well balanced, long-term investment portfolio”.
Pretty cringe.
Sounds like we have the first of many late adopters. Best of luck.
Immediately social media filled with screenshots of people transferring or closing their Vanguard accounts. Will be interesting to see how this trends this year and if Vanguard and other laggards come around.
But there’s more promising updates as well on the heels of the ETF approval — BlackRock CEO Larry Fink said yesterday they "see value in having an Ethereum ETF”.
Window closing to front run the bankers on ETH as well.
First and foremost congratulations to all of you who have DCAd and positioned yourselves appropriately prior to this ETF approval. You were early.
A couple of things to keep in mind moving forward:
There will be high volatility now that big players have entered the space
Short term nobody knows where price will go — but we can be fairly confident we see a larger upswing through year end coinciding with the halvening and a potential ETH ETF
We are nowhere near “the top” of this bull run. When we are you will know it. Cab drivers, bar tenders, and normies will all be talking about crypto
The halvening is approaching in April — this has historically been a solid catalyst for a crunch on supply, causing price to rally. If we see a new ATH past the $60K range I think it likely comes later this year
If Bitcoin is able to cross $50K and range there — $ETH will surpass $3K and alts will follow in turn — remember the cyclic pattern I touch on for market flows in our paid posts
My informal advice for anyone who feels behind on crypto or Bitcoin right now doesn’t change much:
Focus on building a spot BTC and ETH allocations (buy on red days, and buy over time)
Research some blue chip alts ( $LINK, $SOL, $MATIC, $INJ) and hold these long term
Spread out your allocation between an exchange and cold storage to ensure you don’t have a singular point of failure
Stay humble.
The pumps that are destined to come in this space are going to blow people’s minds.
It will be mania and it will be madness.
The two more important rules I have learned in crypto are : 1.) be patient/sit on your hands and 2.) ignore the noise.
Good news is this is no longer a ponzi or scam or fad. Crypto, Bitcoin, and digital assets are in the early stages of their revolution.
They aren’t going anywhere but up.
If you’re interested in more specific commentary on how to position in crypto and broader markets check out the guide below:
Other Financial Markets Updates
Outside the Bitcoin updates this week there have been some notable developments in financial markets.
December CPI inflation rate rises to 3.4%, above expectations of 3.2%
BlackRock, $BLK, the world's biggest asset manager, has said it expects bond ETFs to grow to $6 trillion under management by 2030, from just over $2 trillion currently, per Reuters (Unusual Whales)
More than half (56%) of entry-level knowledge worker roles are predicted to be eliminated over the next five years due to the influence of AI, according to Forbes (Unusual Whales)
PPI falls for third month in a row - PPI -0.1% MoM, Exp. 0.1% PPI Core 0.0% MoM, Exp. 0.2%
Housing defaults are now at the highest levels in a decade (House of Trades)
JPMorgan made more annual profit than any firm in US banking history (Zerohedge)
The FAA says it will audit Boeing's production line after 737 Max 9 accident - CNBC
Global News
Well folks the Aliens are back with fresh sightings of reported “10 foot” beings spotted on an island off Brazil just weeks after mall goers in Miami claimed to encounter 7-8 foot creatures amid a massive police response.
Ukraine is struggling to repel Russia after sending the majority of it’s military age males to die on the eastern front, and security related indicators in the US continue to flash red with the Boeing plane integrity scare and a massive shipment of weapons going to missing that was supposed to end up in Zelensky’s army.
The US presidential contest is heating up as folks continue to speculate on the future of Donal Trump’s political career, who he might choose as running mate, and who will end up being the democratic nominee.
As part of their annual meeting in Davos, the World Economic Forum will be discussing what they have labeled in internal memos as "Disease X" on January 17, 2024. According to them “…’Disease X’ could result in 20 times more fatalities than the coronavirus pandemic…”
Sounds like some more predictive programming but what do I know!
Palestinian protestors took over the Colorado State Capitol and disrupted sessions.
American intel officials have warned of the risk of Hezbollah attacking U.S.
Secret underground tunnels were found at the Chabad synagogue in Brooklyn this week — sparking all kinds of speculation as to what they were being used for. A mattress, children’s high chair, and infant clothes were supposedly found. Arrests were made by NYPD.
Iran navy says that it has seized an oil tanker off Oman
More than $1bn worth of shoulder-fired missiles, kamikaze drones and night-vision devices that the US has sent to Ukraine have not been properly tracked by American officials, a new Pentagon report concludes, raising concerns they could be stolen or smuggled - NY Times (Insider Paper)
UK PM Richi Sunak has authorized military strikes on Houthi rebels in and around the Red Sea. President Biden bypassed congress to authorize airstrikes last night — but early reports indicate Houthi forces are relatively unbothered by the strikes. Important to understand that these forces are backed by Iran and any sizeable confrontation risks a larger spillover within the region.
Houthi leader Abdul Malik al-Houthi in a televised speech earlier today said the following:
"Any American attack will not remain without a response. The response will be greater than the attack that was carried out with twenty drones and a number of missiles"
We will continue to cover the conflict in the Red Sea as it’s giving signs that it could be the next area where we a larger event lead to direct action by Western powers.
I will see you all on Tuesday morning.
Have a great long weekend.
Disclaimer - I am a former trader and enterprise sale guy who commentate on markets and global events — none of my financial takes should be considered formal financial advice. Do your own research hand never invest more than you can afford to lose
Curious to hear your thoughts on STX.