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30th May 2024 > > BTC adoption.


tl;dr

BTC adoption whichever way you turn has only one long-term impact for the benefit of us as early investors.

Market Snap









Market Wrap

I leave you alone for two days and look at what you do to rates. The 2s/10s inversion remains a red flag warning, but no-one but me seems to care. Stocks are off, as are cryptos to a degree.


BlackRock has updated its S-1 form for a spot ETH ETF, presumably after discussions with the SEC. Current market consensus appears to be end June/beginning of July for the launch. We saw with BTC that the final amendments can happen very quickly so there is room for market surprise.


Curious Cryptos’ Commentary – Spot BTC ETFs

The ten BTC ETFs in the US now hold over 1mm BTC, about 5% of the total number of BTC that will ever be in existence.


Some proportion will have been recycled from either hot or cold storage, or from exchanges, into the ETFs, simply to remove all custodial risk for a small annual fee. Personally, I think much of the 1mm BTC has been bought for brand-new investment, investment that is accelerating as more and more funds gain internal approval to get involved, as they do not want to get left behind. Why do I say this?


There are some investment funds who are focused on outperforming their competitors, but they are surprisingly few and far between. One example is Fidelity, which has long been a supporter of blockchain technology. It was always a pleasure to deal with the portfolio managers and execution desks at Fidelity, for their corporate culture is on the more aggressive side amongst their peers. The same can be said about BlackRock.


On the flip-side, most pools of investment funds are more concerned with not underperforming against the competition. They hide in the pack and hope to get away with being close to the average. But there is a continuum, and as more and funds get involved, more and more feel the need to get involved, to prevent a divergence in performance outcomes. This is the reason why all investment funds, all pension funds, all insurance companies, all corporate treasury, all sovereign wealth funds, and anyone else you can think of, will one day have between 3% and 5% of their investment money in cryptos, mostly BTC.


Twelve consecutive days of net inflows suggests I might be right on this point. If so, we are at the very start of wholesale crypto adoption, making that old four-year cycle theory rather redundant.


Curious Cryptos’ Commentary – Corporate adoption of BTC

Corporate adoption was always going to be one of the major slow-burners, but a small number are joining the trailblazers of Tesla and MicroStrategy.


Semler Scientific announced on Tuesday that it has bought 581 BTC for its corporate balance sheet, nearly 20% of its market cap. Chairman Eric Semler knows his potatoes:


"Our Bitcoin treasury strategy and purchase of Bitcoin underscores our belief that Bitcoin is a reliable store of value and a compelling investment. We believe that Bitcoin has the potential to generate outsize returns as it gains increasing acceptance as digital gold.”


Semler Scientific now takes its place as a means of buying BTC on a leveraged basis with no liquidation risk. The CC Treasury is taking a long hard look at adding this company to the crypto stocks part of its portfolio.

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