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PLUS: ETH ETFs see inflows?
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What we’ve cooked up for you today…
🤔 The Bitcoin strategic reserve
🤑 You’re not bullish enough
🔄 The tables have turned
💰 And more…
MARKET WATCH ⚖️
Prices as at 4:00am ET
Only the top 20 coins measured by market cap feature in this section
THE BITCOIN STRATEGIC RESERVE 🤔
BREAKING: U.S. Strategic Bitcoin Reserve to Be Funded Partly by Revaluing Fed's Gold, Draft Bill Shows
So it’s been a couple of days since Sen. Cynthia Lummis announced her Bitcoin strategic reserve bill…
And now we have a couple more details on how this piece of legislation would work.
Firstly we now know that the name of the bill will be the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024” or “BITCOIN Act of 2024” for short.
"Bitcoin as a decentralized and scarce digital asset, offers unique properties that complement existing national reserves, strengthening the position of the United States dollar in the global financial system,"
The bill also outlines a “Bitcoin Purchase Program”.
This program requires that the US purchases no more than 200,000 Bitcoin per year over a 5 year period.
The Bitcoin would be held for at least 20 years.
The only reason it could ever be sold would be to pay off federal debt.
And in case you’re wondering…
US federal debt just crossed over $35 trillion.
How does the government plan on purchasing 200,000 Bitcoin per year under this bill?
One way is by revaluing the Federal Reserve banks gold certificates to reflect their fair market value.
Now this can get a little complicated but stick with us here…
If this bill were to pass, Federal Reserve banks would handover all of their gold certificates to the Treasury secretary.
The Treasury secretary would then issue new gold certificates to the Federal Reserve banks that reflect the fair market value price of gold.
Because here’s the thing…
These gold certificates were issued to the Fed back in 1934 and their value is based on the price of gold back then.
The price of gold has more than 50x’d since 1934 so these certificates are wildly undervalued.
The Federal Reserve banks would then “remit the difference in cash value between the old and new certificates" to the Treasury secretary.
These funds would then be used to purchase Bitcoin.
As we’ve said before, there is no guarantee that we ever see this bill become law.
But it is certainly interesting…
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YOU’RE NOT BULLISH ENOUGH 🤑
Washington has done a complete 180 on Bitcoin.
We need to re-evaluate what we though was possible.
That’s the latest out from Matt Hougan.
Matt Hougan is the Chief Investment Officer at Bitwise, the 5th largest Bitcoin ETF issuer.
Every week, Matt releases a market commentary memo.
This week Matt broke down his Bitcoin 2024 conference highlights:
Donald Trump announced plans for the US to build a national Bitcoin stockpile
Sen. Cynthia Lummis (R-WY) introduced a bill calling for the US to purchase 1 million Bitcoin
RFK Jr. called on the US treasury to purchase 4 million Bitcoin
Rep. Ro Khanna (D-CA) called on Democrats to “reject the hostile policies of the past” and embrace Bitcoin
Sen. Roy Haggerty (R-TN) said Bitcoin and cryptocurrencies need to thrive in America
Kamala Harris’ advisors have began reaching out to top crypto companies to “reset” the publics perception on their crypto stance
Washington has well and truly changed it’s tone on Bitcoin.
On a level we’ve never seen before.
Matt explains:
“Less than two years ago, FTX was collapsing in a historic fraud, Bitcoin was trading for $17,000, and skeptics were dancing on crypto’s grave. Now politicians are openly talking about building a Bitcoin Fort Knox.”
It’s easy to look at these claims by politicians and chalk it up to shameless opportunism.
And to a certain extent that’s probably true…
But Matt believes it doesn’t matter. That’s just how politics works.
Politicians are now embracing crypto because Americans are embracing crypto.
Right now we’re talking about the US holding Bitcoin as a strategic reserve asset.
That’s what matters.
And that’s MASSIVE progress.
Matt than raises three scenarios that could very well happen in the short-term:
A G20 country adds Bitcoin to its balance sheet in order to front-run the US
Comprehensive crypto legislation gets passed quicker than expected as bipartisan support increases
Wall Street massively embraces crypto at a scale larger than we all expected
On that last point…
Goldman Sachs CEO David Solomon told CNBC that Bitcoin could be a store of value.
“These ideas would have been the stuff of daydreams a year ago. But after what I witnessed last week, they look more likely than not. If the 2024 Bitcoin Conference conveyed anything, it was this: It’s time to rethink what’s possible for bitcoin.”
This time really is different. 😎
THE TABLES HAVE TURNED 🔄
How have the Bitcoin and Ethereum ETFs been doing this week?
Let’s kick things off with Bitcoin.
And unfortunately it’s not great…
Yesterday, the Bitcoin ETFs saw net outflows of $18.3 million.
Oddly enough, BlackRock was the only issuer to see inflows yesterday with $74.9 million.
Grayscale, ARK Invest, VanEck all saw net outflows of $73.6m, $7.9m & $5.6m respectively.
BUT…
On the Ethereum side, things were a little different.
The Ethereum ETFs saw their first net inflow day since launch, with $33.7 million coming in.
Here’s the breakdown:
BlackRock ETHA: $118.0 million 🥇
Fidelity FETH: $16.4 million 🥈
Grayscale ETH: $12.4 million 🥉 (this is the mini Ethereum ETF spinoff by the way)
Grayscale’s ETHE (their Ethereum trust conversion) saw net outflows of $120.3 million.
With only $120.3 million flowing out of ETHE, the rate of outflow is already slowing down.
Checkout the chart below for a comparison of outflows between GBTC and ETHE.
You can clearly see how rapid the ETHE outflows were out the gate. 🏃
That’s why we’ve maintained that Ethereum has held up considerably well despite significant outflows from Grayscale. (price of ETH is down ~5% in the last 7 days)
But now that net inflows are back on the menu…
The price of ETH could start rocketing up soon. 🚀
CRACKING CRYPTO 🥜
SEC seeks to amend Binance lawsuit to avoid ruling on SOL's security status. The SEC is seeking to amend its ongoing lawsuit against Binance to avoid ruling on the security status of Solana and other tokens.
Over 41.5% of Mt. Gox Bitcoin distributed as creditors continue to hodl. Mt. Gox creditors hold 41.5% of distributed Bitcoin despite a $4 billion distribution, showcasing continued hodling and minimal sell pressure.
U.S. Strategic Bitcoin Reserve to Be Funded Partly by Revaluing Fed's Gold, Draft Bill Shows. The office of Senator Cynthia Lummis shared a draft of the legislation with CoinDesk.
SEC sues BitClout founder Nader Al-Naji, says he lied to investors about the project's decentralization. The SEC charged BitCloud founder Nader Al-Naji with fraud after the agency says he used investors' funds in part to pay rent on a mansion.
WHAT WE’RE READING 📚
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The Hustle (link) - Get Smarter on Business and Tech
Your Next Breakthrough (link) - Personal growth with Mark Manson
The Neuron (link) - AI trends and tools to keep you ahead
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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 is considered the first altcoin? |
MEME CORNER 😂
Because what would the crypto world be without its share of memes?
Trivia Answer: D) Namecoin 🥳
The first altcoin, Namecoin (NMC), was released in April 2011, three years after Bitcoin.
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