All Street Bets NewsletterCoinbase Smart Wallets
The time is almost here (we think). Coinbase has been teasing about their “Smart Wallet” integration these last few weeks with the rumors circul...
All Street Bets NewsletterIs The Bull Market Over?
"Bitcoin is down 15% off of its all time highs ...""Bitcoin was rejected multiple times off of 70k range...""The bull market is over!" As of June...
All Street Bets NewsletterHow Does The Macro Environment Impact $BETS?
Earlier this week we wrote about the Macro Environment, now we will dive in to see what this means for $BETS. First, let's quickly go over...
All Street Bets NewsletterCoinbase Smart Wallets
The time is almost here (we think). Coinbase has been teasing about their “Smart Wallet” integration these last few weeks with the rumors circul...
All Street Bets NewsletterIs The Bull Market Over?
"Bitcoin is down 15% off of its all time highs ...""Bitcoin was rejected multiple times off of 70k range...""The bull market is over!" As of June...
All Street Bets NewsletterHow Does The Macro Environment Impact $BETS?
Earlier this week we wrote about the Macro Environment, now we will dive in to see what this means for $BETS. First, let's quickly go over...
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Is the top in? 🤔 let’s see:
Firstly, this is a macro dive in, and we will see how it relates to $BETS later on. In my opinion (as your average crypto bro who is by no means an expert) no, the top is not in as of May 2024. I don't know when we will reach this point, but based on the below we may have a long way to go. Two of the most famous sayings in investing & economics are:
-"This time is different"
-"History doesn’t repeat itself, but it often rhymes"
Remember these two as we read below. Before we dig into the charts, lets go over a few basic Bitcoin (BTC) references:
Block – groups of transactions permanently stored on the Bitcoin blockchain
Mining – network wide competition to solve complex math problems that validate transactions and help secure the BTC network
Reward – financial incentive (in BTC) given to Bitcoin miners for validating blocks of transactions on the BTC blockchain
“The Halving” every 210,000 “blocks” (about every 4 years), the reward for mining Bitcoin gets cut in half. This was implemented to keep BTC inflation in check - less newly created BTC are available creating more scarcity.
Here is a chart to show the mining reward per block, and about every 4 years, the reward will continue to get cut in half, until all 21 million BTC have been mined (this should be around the year 2140).
Now let’s get into it. Here are some key points comparing the previous cycles to this one.
One of the most iconic charts in BTC history is the stock to flow model from @100trillionUSD on X. The chart takes the stock to flow ratio (used across many assets like gold) and illustrates it over time. The Stock is the amount of BTC (21 million ever, it is not possible to create more) and the Flow meaning the yearly production (mining). With the claim that scarcity is a powerful force. As the amount of BTC being mined goes down over time, supply and demand will take over, and the price of BTC should continue to go up over time.
(blue dots indicate the time around the halving, with red dots indicating the time post halving). Here is a article where PlanB goes into more depth on this topic.
2017 vibes
BTC recently got approved for a Spot ETF in January 2024 (and now Ethereum in May 2024), allowing anyone to invest in BTC or ETH through one of the approved ETF listings (subject to the country approving these listings). Asset Management firms, Hedge Funds, Banks, companies, 401k’s, your grandmother all have easy access to both ETF's now; and for the institutions, they can legally have exposure to crypto now. You should note - buying this ETF does not allow you to hold your actual BTC, the holding firms will hold the BTC. But similarly, to investing in gold on the stock market, you can get exposure to BTC and exposure to the price of BTC through these ETFs. Since the approval, there has been a FLOOD of BTC inflows. People want BTC, even if it is 1%, 2%, 3% of their holdings. JPMorgan’s assets under management in 2023 was $3.4 trillion. If they decide as a company to hold 1% of their assets in BTC, that is $34 billion worth of BTC. Below is a chart of the weekly inflows (or outflows in red) in $millions added between all the ETF holdings combined. As you can see the demand is there, and there are still a plethora of Asset Management firms, Banks, individuals, companies, etc that do not hold any … yet.
I am expecting Ethereum will have hundreds of millions of inflow in its first few weeks as well; maybe not as much as BTC, but once the Ethereum ETF is listed and tradeable we will be able to see how much institutional and retail demand there is.
United States economic data has started to stabilize to the norm. Inflation is still around 3%, but it has come down drastically over the last few months; and the unemployment rate is at a healthy level, around 3.9%. The fear was that inflation would continue to spike, consumer spending would go down drastically which would force companies to lay off employees - but all of the recent data has been pretty positive. For the most part, people are employed, spending money and going about their days without much fear. Yes, your grocery bills are a lot higher but salaries have also increased, and I believe everything will get back to the relative balance soon. If these trends continue, it will allow the Federal Reserve to cut the federal interest rates from its current level of 5.25%-5.50%.
Cutting rates is bullish for the economy if the economy is in a healthy state - as it allows companies and individuals to borrow money at a lower rate, giving them capital to start or expand their businesses as well as allow people to take out lower mortgage rate loans for houses. If people have money and are employed, this could potentially create even more BTC and cryptocurrency inflows. People are starting to understand, holding cash or money in your bank account will slowly lose value, and you need to invest in assets that keep up or rise above inflation levels. BTC is one of those solutions. With big banks like JPMorgan & UBS saying they are buying BTC ETFs, the everyday person might want to follow and have some BTC exposure as it gets more normalized.
We are also seeing a big push for crypto from the U.S. Presidential candidates. They are realizing crypto is here to stay and seeing some of the smartest minds in the space leave to countries with more friendly laws. Donald Trump recently said “I will ensure the future of crypto and Bitcoin will be made in the USA, not driven overseas” as seen below. Being pro-crypto will allow really cool stuff to be built and in turn, allow BTC and ETH and crypto assets to flourish with less negative sentiment. Everyday people will want to use crypto and invest in crypto and we will be here teaching and helping them.
Now, this is the current state of the environment and here, I am using history and speculation to create this thesis. Things can change at any minute – COVID for example came out of nowhere and destroyed the economy in the short term. With how the economy is looking at a macro level, and how BTC has performed post halving, I think the crypto economy is in a good state. Some can say we are still early. Last cycle, family members and people who have never heard of BTC before were asking how to buy. Crypto commercials were everywhere with celebrity endorsements. JPEGs were selling for MILLIONS of dollars. This is the madness of the top and now I am waiting for this to happen again. Will this time be different?
In the next piece, we will discuss how this relates to $BETS.
(None of this is Financial Advice, strictly for informational purposes)
Is the top in? 🤔 let’s see:
Firstly, this is a macro dive in, and we will see how it relates to $BETS later on. In my opinion (as your average crypto bro who is by no means an expert) no, the top is not in as of May 2024. I don't know when we will reach this point, but based on the below we may have a long way to go. Two of the most famous sayings in investing & economics are:
-"This time is different"
-"History doesn’t repeat itself, but it often rhymes"
Remember these two as we read below. Before we dig into the charts, lets go over a few basic Bitcoin (BTC) references:
Block – groups of transactions permanently stored on the Bitcoin blockchain
Mining – network wide competition to solve complex math problems that validate transactions and help secure the BTC network
Reward – financial incentive (in BTC) given to Bitcoin miners for validating blocks of transactions on the BTC blockchain
“The Halving” every 210,000 “blocks” (about every 4 years), the reward for mining Bitcoin gets cut in half. This was implemented to keep BTC inflation in check - less newly created BTC are available creating more scarcity.
Here is a chart to show the mining reward per block, and about every 4 years, the reward will continue to get cut in half, until all 21 million BTC have been mined (this should be around the year 2140).
Now let’s get into it. Here are some key points comparing the previous cycles to this one.
One of the most iconic charts in BTC history is the stock to flow model from @100trillionUSD on X. The chart takes the stock to flow ratio (used across many assets like gold) and illustrates it over time. The Stock is the amount of BTC (21 million ever, it is not possible to create more) and the Flow meaning the yearly production (mining). With the claim that scarcity is a powerful force. As the amount of BTC being mined goes down over time, supply and demand will take over, and the price of BTC should continue to go up over time.
(blue dots indicate the time around the halving, with red dots indicating the time post halving). Here is a article where PlanB goes into more depth on this topic.
2017 vibes
BTC recently got approved for a Spot ETF in January 2024 (and now Ethereum in May 2024), allowing anyone to invest in BTC or ETH through one of the approved ETF listings (subject to the country approving these listings). Asset Management firms, Hedge Funds, Banks, companies, 401k’s, your grandmother all have easy access to both ETF's now; and for the institutions, they can legally have exposure to crypto now. You should note - buying this ETF does not allow you to hold your actual BTC, the holding firms will hold the BTC. But similarly, to investing in gold on the stock market, you can get exposure to BTC and exposure to the price of BTC through these ETFs. Since the approval, there has been a FLOOD of BTC inflows. People want BTC, even if it is 1%, 2%, 3% of their holdings. JPMorgan’s assets under management in 2023 was $3.4 trillion. If they decide as a company to hold 1% of their assets in BTC, that is $34 billion worth of BTC. Below is a chart of the weekly inflows (or outflows in red) in $millions added between all the ETF holdings combined. As you can see the demand is there, and there are still a plethora of Asset Management firms, Banks, individuals, companies, etc that do not hold any … yet.
I am expecting Ethereum will have hundreds of millions of inflow in its first few weeks as well; maybe not as much as BTC, but once the Ethereum ETF is listed and tradeable we will be able to see how much institutional and retail demand there is.
United States economic data has started to stabilize to the norm. Inflation is still around 3%, but it has come down drastically over the last few months; and the unemployment rate is at a healthy level, around 3.9%. The fear was that inflation would continue to spike, consumer spending would go down drastically which would force companies to lay off employees - but all of the recent data has been pretty positive. For the most part, people are employed, spending money and going about their days without much fear. Yes, your grocery bills are a lot higher but salaries have also increased, and I believe everything will get back to the relative balance soon. If these trends continue, it will allow the Federal Reserve to cut the federal interest rates from its current level of 5.25%-5.50%.
Cutting rates is bullish for the economy if the economy is in a healthy state - as it allows companies and individuals to borrow money at a lower rate, giving them capital to start or expand their businesses as well as allow people to take out lower mortgage rate loans for houses. If people have money and are employed, this could potentially create even more BTC and cryptocurrency inflows. People are starting to understand, holding cash or money in your bank account will slowly lose value, and you need to invest in assets that keep up or rise above inflation levels. BTC is one of those solutions. With big banks like JPMorgan & UBS saying they are buying BTC ETFs, the everyday person might want to follow and have some BTC exposure as it gets more normalized.
We are also seeing a big push for crypto from the U.S. Presidential candidates. They are realizing crypto is here to stay and seeing some of the smartest minds in the space leave to countries with more friendly laws. Donald Trump recently said “I will ensure the future of crypto and Bitcoin will be made in the USA, not driven overseas” as seen below. Being pro-crypto will allow really cool stuff to be built and in turn, allow BTC and ETH and crypto assets to flourish with less negative sentiment. Everyday people will want to use crypto and invest in crypto and we will be here teaching and helping them.
Now, this is the current state of the environment and here, I am using history and speculation to create this thesis. Things can change at any minute – COVID for example came out of nowhere and destroyed the economy in the short term. With how the economy is looking at a macro level, and how BTC has performed post halving, I think the crypto economy is in a good state. Some can say we are still early. Last cycle, family members and people who have never heard of BTC before were asking how to buy. Crypto commercials were everywhere with celebrity endorsements. JPEGs were selling for MILLIONS of dollars. This is the madness of the top and now I am waiting for this to happen again. Will this time be different?
In the next piece, we will discuss how this relates to $BETS.
(None of this is Financial Advice, strictly for informational purposes)
The Bitcoin halving thesis is that the cycle top has always come ~18 months AFTER the halving. The BTC halving for this cycle was April 20th, 2024 (iconic) which would indicate the bull run should continue until mid to late 2025 if the BTC trends continue. In this first chart from @rektcapital below, the dotted vertical lines show the halving date and as you can see, in every cycle there are a few weeks of chop followed by a massive run up - smashing previous all time highs. As the amount of BTC mined goes down, supply shock kicks in. The orange circles compare where we are now, to what has happened at this point in previous BTC halving cycles. Remember the most famous sayings?
In the chart below from @thescalpingpro on X, @thescalpingpro illustrates that a good time to have bought BTC was around ~500 days (about 16 and a half months) before the halving, and if you were to trade BTC to sell, about ~500 days after the halving would be a good time to sell. This should not be used as financial advice, as there is no guarantee this can continue and be profitable in the future, but a very interesting look at the history of BTC around the time of the halving.
The Bitcoin halving thesis is that the cycle top has always come ~18 months AFTER the halving. The BTC halving for this cycle was April 20th, 2024 (iconic) which would indicate the bull run should continue until mid to late 2025 if the BTC trends continue. In this first chart from @rektcapital below, the dotted vertical lines show the halving date and as you can see, in every cycle there are a few weeks of chop followed by a massive run up - smashing previous all time highs. As the amount of BTC mined goes down, supply shock kicks in. The orange circles compare where we are now, to what has happened at this point in previous BTC halving cycles. Remember the most famous sayings?
In the chart below from @thescalpingpro on X, @thescalpingpro illustrates that a good time to have bought BTC was around ~500 days (about 16 and a half months) before the halving, and if you were to trade BTC to sell, about ~500 days after the halving would be a good time to sell. This should not be used as financial advice, as there is no guarantee this can continue and be profitable in the future, but a very interesting look at the history of BTC around the time of the halving.
Thank you so much for writing about this informative article, i bookmarked your news! #bscver #bets.
Matt
Matt
1 comment
Thank you so much for writing about this informative article, i bookmarked your news! #bscver #bets.