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- 🥜 Downside Of Bitcoin
🥜 Downside Of Bitcoin
PLUS: MicroStrategy goes mainstream
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GM to all you crypto nuts. Crypto Nutshell #509 cruisin’ steady 🛳️ 🥜
We're the crypto newsletter that's more adventurous than sailing through uncharted waters with a crew of misfits... 🏝️⚓
What we’ve cooked up for you today…
🏦 MicroStrategy goes mainstream
😢 The downside of Bitcoin
📈 Ethereum’s time to shine
💰 And more…
Prices as at 2:20am ET
MICROSTRATEGY GOES MAINSTREAM 🏦
BREAKING: Bernstein predicts MicroStrategy's momentum to further accelerate amid potential Nasdaq 100 inclusion
Everyone’s been talking about MicroStrategy lately…
And that’s mainly because people can’t wrap their heads around the flywheel that Michael Saylor has created.
But there’s some even bigger news involving MicroStrategy that’s popped up recently.
And that’s MicroStrategy’s likely addition into the Nasdaq-100.
“This would lead to inclusion of MSTR in some of the largest ETFs such as QQQ (5th largest ETF), leading to one-time fresh buying and ongoing participation in future inflows.”
This is MASSIVE news.
In case you don’t know:
The Nasdaq-100 Index is a collection of the 100 largest, most actively traded companies listed on the Nasdaq stock exchange.
According to ETF analyst, Eric Balchunas, the announcement will be made on the 13th of December. (Fund rebalancing will take place on the 23rd of December)
Here’s why this news is so important:
Massive Buying Pressure From Index Funds & ETFs tracking the Nasdaq-100: Eric Balchunas is predicting an initial $2.09 billion in buying from ETFs that track the Nasdaq like Invesco’s QQQ - Passive inflows will follow
Bitcoin Goes Mainstream With MicroStrategy as a Bitcoin proxy: A Nasdaq-100 inclusion means traditional investment portfolios now have exposure to Bitcoin
Saylor’s Strategy Validated: Michael Saylor turned a struggling company into one of America’s 100 biggest, simply by betting on Bitcoin. This milestone proves he was right
Eric is also predicting a 0.47% weighting for MicroStrategy’s inclusion in the Nasdaq-100.
Which would interestingly make it the 40th largest holding in the index. (Not bad for an initial listing)
But…
As with anything to do with crypto, there’s been some newfound FUD on this topic.
Here’s the thing with the Nasdaq-100: Financial companies aren’t included in the index
And some people have been questioning MicroStrategy’s classification.
Currently it’s a “technology” stock, but there is a good case for it being a “financial” stock.
Here’s how ETF analyst, James Seyffart explained this issue:
However…
As it stands, MicroStrategy IS a technology stock and the next review isn’t until March 2025.
Which is well after the Nasdaq-100 inclusion deadline in 2 weeks…
DeFi: Shaping the Future of Finance
Explore how DeFi Technologies Inc. (CAD: DEFI & US: DEFTF) bridges traditional finance and the $3T digital asset market. With innovative strategies and global expansion, DeFi is redefining the investment landscape. Gain exposure to Bitcoin, Web3, and beyond with regulated, secure solutions.
THE DOWNSIDE OF BITCOIN 😢
Bitcoin has one major downside.
And no one is talking about it.
That’s the latest out of controversial influencer, Andrew Tate.
Andrew Tate is a polarising figure, to say the least.
But Tate is undeniably an expert on crypto, having made tens of millions of dollars in the space.
(if you want to see see how, check out our full breakdown here)
In his latest update, Tate pointed something out:
Bitcoin has a major downside.
“Let me tell you all the downside of Bitcoin… Everyone's happy Bitcoin is going to the moon, but there is a downside.”
That downside? Bitcoin outperforms everything.
“Each year [cash] goes down in purchasing power because of inflation. The problem we currently have with this Bitcoin cycle is that nothing can outperform Bitcoin.”
Why would this be a downside?
In Tate’s view, once people realize nothing outperforms Bitcoin, the incentive to build or invest in anything else, vanishes:
“Every time someone pitches me a new business - whether it’s another warehouse, hotel, cigar bar, restaurant, or coffee shop - I find myself thinking, “I’ll just buy more Bitcoin.” But if everyone reaches that same conclusion, who’s going to build anything if we all just choose Bitcoin instead?”
Tate finished his update with a question:
“This is a genuine question - I’m not claiming to have the answer. What happens to the economy once everyone realizes there’s only one investment worth making on the entire planet?”
Our answer?
At some point in the future, Bitcoin’s returns will normalise. It won’t outperform everything, forever.
It can’t - at a certain size, it just becomes too big to sustain that outperformance.
So whilst we are in the early stages, where it will outperform, you should try and get as much as you can.
Whether you love him or hate him, we do agree with Tate on this:
You do not sell your Bitcoin. 🥇
ETHEREUM’S TIME TO SHINE 📈
The Ethereum ETFs have been crushing it lately.
In fact they’ve been doing so well, that they’ve just recorded their 13th straight inflow day.
That’s a HUGE shakeup compared to what they’ve been doing in the months prior.
And so far this week has seen ~$558.3 million in net inflows.
Here’s the breakdown for yesterday’s flows:
BlackRock ETHA: $75.0 million 🥇
Grayscale ETH: $13.4 million 🥈
Bitwise ETHW: $8.2 million 🥉
But what we really want to focus on today is the chart below.
This chart highlights the net inflows that the Ethereum ETFs have experienced since launch. (The price of Ethereum is overlayed in blue)
And as you can see…
The Ethereum ETFs were basically doing nothing UNTIL after the US election.
(The inflows literally began on November 6th)
And since the election, the price of Ethereum has shot up from ~$2,400 all the way to $3,900 today.
Talk about a change in sentiment…
To wrap up this section, we’ve got a crazy stat for you.
Out of roughly 675 ETFs launched this year, BlackRocks Ethereum ETF is the fourth most successful ETF of 2024. 🤯
Remember when everyone thought Ethereum was dead…?
CRACKING CRYPTO 🥜
Bitcoin poised for 'golden age' in 2025 with $200k milestone projection – Bitwise. Bitwise predicts a transformative year for crypto with innovations driving Bitcoin past $200,000 and stablecoins doubling their market cap.
SEC advances NYSE’s filing to list Bitwise Bitcoin and Ethereum ETF. The US financial regulator is soliciting comments on NYSE’s application to list Bitwise’s cryptocurrency index ETF.
Italy Set to Scale Back Planned Tax Hike on Crypto Capital Gains. The tax increase will be significantly reduced during parliamentary work, lawmakers said.
Citi says stablecoins challenge the idea of bitcoin ending US dollar's dominance. In a newly published report, Citi analysts said stablecoin adoption and growth could “reinforce the U.S. currency’s longstanding global dominance.”
WHAT WE’RE READING 📚
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Your Next Breakthrough (link) - Personal growth with Mark Manson
The Neuron (link) - AI trends and tools to keep you ahead
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