Eleven spot Bitcoin ETFs have just been approved in the US, due to start trading tomorrow morning (US time). What a monumental event in the course of history, where one of the most opposed, hated, loved, revered and feared assets of all time goes ‘public’.
Poor old mate Gary Gensler got rekt in the process too. With the SEC completely bungling the announcement yesterday when their Twitter account was compromised, through to issuing the approval notice before market close today, he made an absolute mess of it.
I loved this part of the story, where Bitcoin dragged the suits into our world of chaos and memes. It was just the most fitting way for this saga to end, where the regulators that unnecessarily stood in the way were embarrassed by their own incompetence. Very bitcoin.
I strongly encourage everyone to read the difference in tone and content of the official SEC announcement by Gensler and compare it to the one by Commissioner Hester Peirce. You will see that Gary begrudgingly approved these vehicles, indicating that the powers that be (cough…Liz Warren…cough) really don’t like that Bitcoin is winning. The power brokers lost this battle, and Bitcoiners won.
Against all the headwinds of governments, regulators, and commentators kicking and screaming, we now have 11 spot ETF instruments, all of whom are competing heavily with low fees, and spinning up advertising budgets. I for one appreciate the tickers of BRRR and HODL the most.
What really matters here is that every financial advisor in the US now has to understand why they shouldn’t allocate client assets to Bitcoin. The career risk has shifted from ‘why should I own it?’, to ‘why didn’t you own it?’. Between the eleven ETF issuers, they collectively manage over $17 Trillion worth of capital. The biggest asset managers on earth have put their reputation behind a Bitcoin ETF, and this forces the level of acceptance onto investors that cannot be understated.
I believe we have just crossed over from the Early Adopters (that is us!) into the Early Majority phase of the Bitcoin S-curve. Things get wild and very big from here on.
Market Status Report: Day 1
As we arrive on the doorstep of this next phase, lets do a quick round check of some key on-chain metrics to show where we stand.
Just 4.7% of all trading days for Bitcoin have seen prices trading higher than where we currently sit. Just about every investor who didn’t lump sum buy the top is profitable. It becomes increaisngly hard to argue Bitcoin is a ponzi scam when it breaks its cycle ATH for the fourth time…that sounds more like a trend.
BTC is trading just -27.8% below its ATH if you can believe that. The Realized Cap is also staging a powerful recovery, now -6.5% below the ATH and accelerating high as new capital starts to really flow into the asset.
Remember, the Realized Cap is an ideal metric to track capital flows, and this signals money is indeed coming back in.
Transfer volumes onchain are really starting to lift back off, pulling away from the $3B/day bear market lows, and rallying to $8B/day. October was the biggest shift as new capital started to enter the space. The market energy is only just warming up as institutional capital starts to really enter.
Over 15.65M BTC is either assumed Lost, or has not moved in over 6-months. To say this is an ATH is an understatement. This is just shy of 80% of the circulating supply, and signifies that we have one of the most resilient holder bases in Bitcoin history behind us.
Hashrate has also punched to a new ATH of 600 EH/s. For a sense of scale, this is equivalent to all 8-billion people on earth completing 75-billion SHA-256 hashes every second. There are 80x more Bitcoin hashes every second than grains of sand on earth.
The Bitcoin network is the most impressive high power computing network the world has ever seen.
Finally, we can look to the ultimate fair value model of the True Market Mean and AVIV Ratio. We have crossed the mid-point, but are clearly some distance from overvalued. This animal has some distance to run if history is any guide, and we just witnessed the launch of a major new source of big money, institutional, and retirement account demand.
Now, it is really important to keep a cool head folks. I doubt we will see major fireworks anytime soon. This thing will take longer than people expect to play out, but could very well outperform expectations when it does. Patience is still necessary, and as you have probably worked out, is the hardest part of investing.
Doing nothing is tricky, because we all know Bitcoin is a million $ per coin asset. But the world hasn’t worked this out yet. So we must wait, and wait, and wait. Today marks an important and victorious milestone, where we held onto our precious orange coins in the face of overwhelming headwinds.
And yet we were proven to be on the right side of history as Wall Street and the regulators capitulated to the DEMAND that wants access to BTC, but can’t yet handle the technical overhead for whatever reason.
Congratulations folks, we just phased shifted, and now things get really interesting.