Bitcoin & Gold Beat S&P 500; China Eyes Spot ETFs; Americans Cut Meals to Save $
News Block #32 (4/09/2024)
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Two Large Chinese Firms Apply for Spot Bitcoin ETFs
Bitcoin’s price continues to fluctuate, but it started the week pushing back over $70,000 and re-approaching its all-time high.
But one thing that hasn’t fluctuated is the strong demand for the top Bitcoin ETFs. Bloomberg Intelligence Senior Analyst Eric Balchunas tweeted the following chart that shows how IBIT and FBTC have seen 59 straight days of inflows.
Balchunas went on to say that these newborn ETFs are in a “league of their own.”
It’s impossible to bring up these inflows without also mentioning the outflows we’ve continued to see in GBTC.
In previous News Block episodes, we said much of the GBTC outflows have been related to bankruptcy estates. One of the largest bankruptcy estates appears to be done selling.
Bloomberg Law reported that Genesis said that on Friday, it finished “monetizing its GBTC shares.” A court filing confirmed that Genesis has sold nearly all of its 36 million GBTC shares, worth more than $2 billion, as of April 2nd.
But here’s the interesting detail…Genesis used nearly all of those funds to buy 32,000 bitcoins to pay off its creditors. Thus, the recent GBTC outflows were not the culprit behind Bitcoin’s recent selloff. In fact, Genesis was actually helping keep the price up, so the recent selling pressure was likely coming from elsewhere in the market.
Outside of GBTC, the impressive performance of the Bitcoin ETFs has been impossible for the investment world to ignore, and some financial institutions still sitting on the sidelines appear to be itching to get involved.
On Monday, the Securities Times reported that two of the largest asset management firms in China, Harvest Fund – which manages more than $230 billion – and Southern Fund – which manages more than $280 billion – have both submitted applications in Hong Kong to launch their own spot Bitcoin ETFs.
So the Bitcoin ETF race is about to see some global competition. Each new Bitcoin ETF will only add another source of demand for Bitcoin itself and just represents the growing appetite for Bitcoin around the world.
Although the ETFs are competing with one another, in the end, they are all accretive to Bitcoin.
Gold and Bitcoin Have Outperformed the S&P 500 Over Last 5 Years
The performance of these ETFs really serves as a signpost for the significant demand that exists for hard money today.
Bitcoin was the best-performing asset class last year and once again took that title in the first quarter of 2024. Goldman Sachs recently posted a chart of the best-performing asset classes so far this year, and it made me laugh because Bitcoin was literally off the chart.
Hard monies like gold and bitcoin have enjoyed a new resurgence in popularity since 2019.
X account Stack Hodler tweeted how gold has outperformed many other asset classes, except for Bitcoin, over that timeframe.
Founder and Managing Partner of 10T Holdings Dan Tapiero also tweeted about gold and Bitcoin’s performance, specifically in the face of rising interest rates and a ballooning Treasury market.
This is all really indicative of Bitcoin being the NEW flight to safety. As long as they keep printing money and adding to the debt, then Bitcoin’s price will continue to reflect the recklessness of these policies. I mean, what’s so crazy about $200,000 per bitcoin when they continue to print trillions?
Americans Skipping Meals to Afford Housing Costs
It’s becoming clearer every day—people want Bitcoin, and when you consider the rising cost of living, it’s not hard to see why they really need it.
People are desperately looking for hard assets that outpace the rate of inflation and help them keep up with the rising costs of homes, education, food, and energy.
Inflation has resulted in Americans cutting back in an attempt to afford the essentials, and one area where you see Americans increasingly becoming priced out of is the cost of renting or owning a home.
This is a huge area I focus on – because what was once a pillar of the American Dream, any form of housing has quickly become unaffordable as home prices, rent costs, and interest rates have all spiked simultaneously.
Redfin recently posted the results of a survey that asked, “What changes or sacrifices are people currently making to afford their monthly housing costs?”
The results were pretty shocking…
This is the sad reality we find ourselves in today. People are skipping meals to afford their housing costs. It’s why it’s never been more important for people to save in assets that will not only outpace the rate of inflation but will also outperform the rise in home prices.
According to PricedinBitcoin21.com, the median US new home has lost 73% against Bitcoin over the last year and 87% against it over the last 5 years.
The key to homeownership for young people may just very well be saving in Bitcoin as it appreciates in value in the future.
Fed’s Neel Kashkari Compares Bitcoin to Beanie Babies
Despite the obvious need for a hard money that can help people protect themselves from the rising cost of living, people like Fed President Neel Kashkari still can’t see the value in Bitcoin. In a recent interview, he was asked when the Fed will put Bitcoin on its balance sheet.
He responded by comparing Bitcoin to beanie babies and said that it has no utility outside of being “a nice toy to help people get around banking regulations.” He then said this:
It was interesting that Kashkari made sure to clarify advanced democracy. Lyn Alden did too. She responded to the clip by saying, “Operator of closed-source money says open-source money is beanie babies”. But notably, they are transitioning from saying Bitcoin has no use at all, to saying it has no use within an advanced democracy. Which means they are ceding that it may have a use for billions of people.”
Natalie Smolenski also made me laugh when she pointed out that Kashkari’s comparison to Amazon in 2004 actually doesn’t make much sense at all.
The funny part about the question asked to Kashkari is that the U.S. government is already one of the largest holders of Bitcoin today.
Wyoming Senator Cynthia Lummis recently tweeted the chart below that shows how the US government holds more than 200,000 bitcoin, making it the largest nation-state holder of Bitcoin in the world.
Senator Lummis posed this question with the chart…“Should the US govt HODL?”
If I were an elected official in this country, I would most definitely be advising the government to hold on to that Bitcoin with diamond hands.
As luck would have it for our government, its bitcoin holdings could very well be one way that America could crawl its way out of this debt problem and return back to some of the principles that made this country great: embracing innovation and freedom.
Until next week, keep stacking.
- N₿
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