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🥜 don't doubt Ethereum
PLUS: 5 BTC Predictions
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We’re the crypto newsletter that’s as gripping as an astronaut stranded on Mars, struggling to survive against all odds... 🚀 🪐
What we’ve cooked up for you today…
🤨 Ethereum ETF updates
🤑 Five Bitcoin predictions
✂️ The halving impact
💰 And more…
MARKET WATCH ⚖️
Prices as at 6:30am ET
Only the top 20 coins measured by market cap feature in this section
ETHEREUM ETF UPDATES 🏦
BREAKING: Grayscale, BlackRock Ethereum ETF applications updated amid SEC delays
The SEC has just delayed its decision on Grayscale and Franklin Templeton’s Ethereum ETF application. (expected)
As reported by Fox Business journalist Eleanor Terrett:
ETF analyst James Seyffart commented on recent developments surrounding the Ethereum ETFs:
Grayscale filed their S-3/prospectus for converting their trust to an ETF - important document
BlackRock filed amendment to 19b-4 ETH ETF application - another important document
Grayscale also filed for an Ethereum mini trust
Although the general consensus is that the Ethereum ETFs will ultimately be denied, it sounds like the issuers aren’t giving up yet.
However, the most important date is still the 23rd of May.
This is the decision deadline date for VanEck’s ETH ETF. And similar to the Bitcoin ETFs, the SEC will likely make a decision on all applications at the same time.
With these recent developments, Bloomberg analysts still have their approval odds at 25%.
Which means there’s still a chance we see them in May…
But it’s not looking likely.
Our view?
We agree with the consensus and foresee a denial on the 23rd of May.
We believe the first approval, will be BlackRock’s application later in the year.
Just a reminder, BlackRock’s ETF approve to deny ratio is currently 576-1.
They don’t lose.
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FIVE BITCOIN PREDICTIONS 🤑
Bitcoin will hit $250,000 this cycle.
That’s one of the latest predictions out from Matt Hougan.
Matt Hougan is the Chief Investment Officer at Bitwise, the 4th largest Bitcoin ETF issuer.
Yesterday, Hougan gave 5 Bitcoin predictions on things we’ll see by the next halving. (2028)
Let’s break them down.
1) Bitcoin’s Volatility Will Decline 50%
Bitcoin’s volatility has been declining for years.
However, Matt believes the introduction of the ETFs will reduce volatility even more:
“On average, institutional investors are more likely than retail investors to rebalance their portfolios (selling high, buying low) and to make steady drip investments into the market (monthly, quarterly, etc.)”
This means we’ll likely see shallower drawdowns, but also slower price rallies going forward.
2) 5% Allocations to Bitcoin Will Become Common in Target-Date Portfolios
Decreased volatility makes Bitcoin a more attractive asset to institutional investors:
“As a result, I suspect we’ll see the “typical” portfolio allocation rise to the point where it is considered normal to have 5% or more of your portfolio in bitcoin.”
Today, typical allocations are between 1 - 3%.
3) Bitcoin ETFs Will Gather $200+ Billion in Flows
The Bitcoin ETFs have currently pulled in ~$12.5 billion in net flows since launch.
But Matt believes they’re only just getting started.
As it stands, they still aren’t fully available at wirehouses like Morgan Stanley. And major institutions are only just beginning their due diligence.
“ETF history also supports the view that flows are just beginning. Net flows into gold ETFs rose year after year for seven straight years after the first one debuted in the U.S. in 2004. Watch for something similar in bitcoin ETFs.”
4) Central Banks Will Begin Allocating to Bitcoin
Central banks hold roughly 20% of all the gold that’s ever been mined.
Matt explains that Bitcoin is essentially a modernised digital (better) version of gold.
With this in mind, before the next halving, Matt expects a central bank to adopt Bitcoin as a reserve asset.
“Those characteristics are increasingly attractive to governments in our increasingly fractious, multi-polar world, where countries like the U.S. are increasingly using financial tools as levers for foreign policy.”
5) Bitcoin’s Price Will Trade Above $250k
With the ETFs continuing to gather assets and major Wall Street firms joining the game, Matt believes Bitcoin will continue to move further into the mainstream.
“At $250,000, bitcoin would be a $5 trillion asset. Could it go higher? Of course. But $250,000 would represent solid progress between halvings, and I think we’ll see at least that.”
All five of Matt’s predictions sound fairly reasonable. Nothing too extreme.
But remember…
These are only predictions, not guarantees.
Although…
It is fun to think about where Bitcoin could end up in the next 4 years. 🤔
THE HALVING IMPACT ✂️
As you all (hopefully…) know by now. Bitcoin just had it’s fourth ever halving.
Let’s take a look at what changed and what we can expect going forward.
Firstly, the daily issuance of new Bitcoin was reduced from 900/day down to 450/day.
This is due to the block reward being reduced from 6.25 BTC down to 3.125 BTC.
As of the fourth halving, 19,687,500 Bitcoin have been mined and issued.
This is equivalent to 93.75% of the maximum supply. (21 million)
That means there’s only 1,312,500 Bitcoin left to be issued over the next 126 years.
BUT, 656,600 BTC (50% of the remaining supply) will be mined between the fourth and fifth halvings.
As the block reward is halved every four years, so to is the inflation rate of Bitcoin.
This halving saw Bitcoin’s inflation rate reduced from 1.7% down to 0.85%.
Here’s the thing though…
For the first time ever, Bitcoin is now verifiably more scarce than gold. 😱
That’s huge for the Bitcoin vs gold debate.
And the gap is only going to widen as the years go on.
As you can see, the halving drastically improves Bitcoin’s supply dynamics.
And as a result, we tend to see HUGE price rallies in the months following the halving.
Just take a look at the price of Bitcoin at each of the previous halvings:
2012: $13
2016: $639
2020: $8,475
2024: $64,100
That’s why the halving is so hyped.
The next few months are about to get crazy… 🚀
CRACKING CRYPTO 🥜
Ripple challenges SEC's $2 billion fine, proposes $10 million settlement instead. Crypto company Ripple has pushed back on the US SEC's $2 billion fine demand, offers $10 million compromise.
PayPal research proposes greener bitcoin mining. A PayPal research group released a report late Monday on how economic incentives could spur bitcoin miners to use cleaner energy.
Mt. Gox's Looming $9B Payout Could Weigh on Bitcoin Prices, K33 Research Warns. The defunct crypto exchange will distribute 142,000 BTC and 143,000 BCH to creditors later this year, 10 years after its implosion due to a hack.
Binance sued in Canada for securities law violations. Binance is served with a new class action lawsuit in Ontario alleging that it sold crypto derivatives in violation of local securities laws.
WHAT WE’RE READING 📚
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CAN YOU CRACK THIS NUT? ✍️
Select your answer below and you’ll be redirected to the results page. (answer explanation can be found after “Meme Corner”)
What was Bitcoin's initial block reward? |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: B) 50 Bitcoin 🥳
The initial block reward was 50 BTC. However, the reward decreases by 50% every 210,000 blocks. Currently it’s down to 3.125 BTC.
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DISCLAIMER: The content of this newsletter is not financial advice. This newsletter is strictly educational and is not investment advice. Please be careful and do your own research.
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