The News Block #27 (03/05/24)
Bitcoin Hits All-time High, BlackRock’s ETF Fastest to $10 Billion, MicroStrategy Issues Debt to Buy More Bitcoin, Bitdeer Reveals New Mining Chip, WEF Posts Rare Pro-Bitcoin Video
Listen to the latest episode of the News Block below. 👇
Bitcoin Hits Its All-time High:
Bitcoin’s price has exploded over the last few weeks and briefly tapped its all-time high of more than $69,000.
Much of the price explosion is attributed to the success of the spot Bitcoin ETFs, which blew away expectations. After only two months of trading, these ETFs are seeing seemingly insatiable demand.
According to BitMEX Research, collectively, they have brought in a whopping $7.9 billion in net inflows over that timeframe. That number would be even bigger if not for GBTC’s continued outflows due to their high fees.
As many of us forecasted, the inflows are dominated by the two largest issuers, BlackRock and Fidelity. BlackRock’s ETF has now seen $8.3 billion in inflows, and Fidelity has brought in $5.2 billion.
As Bitcoin’s price has increased, so has the dollar value of the assets under management (AUM) for these ETF issuers. Last week, BlackRock’s ETF hit a record $10 billion in AUM after less than 40 days of trading.
As the Kobeissi Letter noted, this was the fastest ETF to hit $10 billion in AUM, and only 4% of all ETFs have reached the $10 billion mark.
The continued demand for these ETFs could be a result of more firms beginning to offer them to their clients. This past week, news broke that Merrill Lynch and Wells Fargo will now begin providing access to spot Bitcoin ETFs.
It’s important to remember that the Bitcoin ETFs are just one part of the broader Bitcoin market influencing its price. Other factors could be boosting demand for Bitcoin too – like maybe nation states buying some?
At least, that’s what Edward Snowden thinks…
Whether this pump is due to the ETFs or governments buying, it’s fair to say that this bull market is shaping up to be very different than the ones in the past. In fact, Bitcoin has never hit a new all-time high before the next cycle’s halving…and at this rate, it’s looking more and more likely that we will be hitting that before April. 🚀
MicroStrategy Issues More Debt to Buy More Bitcoin:
MicroStrategy is on quite a tear of its own in 2024. Its stock has performed even better than Bitcoin – up almost double on the year. It recently eclipsed $1,300 per share for the first time in nearly 25 years!
Most investors view MicroStrategy as a leveraged Bitcoin play due to its ability to raise capital through stock sales and debt to increase its Bitcoin holdings.
This week, the company announced a new proposed private offering of $600 Million of convertible senior notes.
Not only will this debt sale provide MicroStrategy with more cash to convert into bitcoin, but it also does something else – it increases liquidity for MicroStrategy’s stock, which will allow the company to continue executing its future Bitcoin strategy.
Preston Pysh explained this well:
So what is Preston saying here?
By offering more convertible debt, MicroStrategy is attracting even more trading activity in the derivatives market as people trade the debt and the stock whenever there are large price differences between the two MicroStrategy financial products. That’s what he means by “capturing the arbitrage.” Ultimately, this will continue to boost liquidity for MicroStrategy’s stock, making it easier to issue more stock down the road to convert to even more bitcoin.
What Saylor and MicroStrategy are essentially doing here is a “speculative attack” – borrowing money in a weaker currency – like the dollar – and investing the proceeds in a stronger money – like Bitcoin.
This is a no-brainer strategy if one believes that the rate of Bitcoin’s appreciation will surpass the rate of inflation and the interest payments on the debt.
It’s only a matter of time before other companies around the world catch wind of the pioneering corporate strategy MicroStrategy is implementing. Until then, MicroStrategy will continue to outperform, and onlookers will continue to watch their stock in awe.
Make sure to check out my recent interview with Michael Saylor from Bitcoin Atlantis in Madeira to hear more on this subject.
Bitdeer Reveals New ASIC Mining Chip:
Our main sponsor, Bitdeer, dropped some exciting news this week that I wanted to share when it announced that it has successfully designed a new Bitcoin mining chip, the SEAL01.
An important takeaway from the announcement was the efficiency of the chip. The 18.1 J/TH efficiency ratio is extremely competitive when compared to other existing mining chips on the market.
But Bitdeer isn’t stopping with the chip. It also plans to mass-produce its very own mining rig, the SEALMINER A1.
This is exciting news because one of the biggest concerns in the Bitcoin mining ecosystem today is the centralization at the ASIC manufacturing level. Two companies, Bitmain and MicroBT, have absolutely dominated the space.
To give you some evidence of this, Galaxy Research recently looked into what mining rigs public Bitcoin mining companies ordered in 2023 and found that rigs from Bitmain and MicroBT made up a whopping 94% of the orders.
The fact that Bitdeer is about to provide some much-needed optionality and competition to this part of the mining ecosystem is a great development to see. Ultimately, Bitdeer said, “This supports the security of the civilization-transforming Bitcoin network.”
We couldn’t agree more, and we are proud to call Bitdeer a sponsor of this show.
WEF Posts Rare Pro-Bitcoin Video:
Bitcoin mining frequently — and unfairly — gets a lot of bad press coverage despite all of the benefits it can bring to society. However, it appears that the truth is becoming too obvious for Bitcoin detractors to ignore any longer.
This was never more apparent than when the World Economic Forum published a rare pro-Bitcoin video last week.
The WEF’s video focused on the Congo’s Virunga National Park - the first national park to run a Bitcoin mine!
The video explains how the mined bitcoin helps fund a local factory’s operations and how that factory provides local jobs and reduces deforestation in the community.
I expect we’ll hear more and more stories like this as the benefits of Bitcoin mining become more widely understood. It’s only a matter of time before the WEF and other agencies can no longer deny the benefits miners can bring to communities worldwide.
To wrap up – I had the privilege of speaking at Bitcoin Atlantis in beautiful Madeira this past weekend, and I am still reeling about how wonderful the conference was.
I left Madeira feeling incredibly excited about the future, and it wasn’t just because Bitcoin’s price was soaring. As you may have heard, I also got engaged!
Thank you, Bitcoin, for bringing me hope and a Bitcoin-loving partner who I get to HODL for life!
Until next week, keep stacking.
- N₿
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NEW: Lyudmyla Kozlovska: Financial Surveillance & Censorship, Defending Bitcoin Mining Against Ban
Lyudmyla Kozlovska is President of the Open Dialogue Foundation, an organization established in Poland in 2009 to protect human rights, democracy, and the rule of law in the post-Soviet era -- especially in Kazakhstan, Russia, Ukraine, Moldova and Poland.
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