Dispatch #201: The Height of BTC as an Asset

In this patch of your weekly Dispatch:

• A Final Countdown ⏰
• A Near Target 🎯
• A Gold Record 🥇

The Big Idea

Bitcoin Runs Up to $65,000

Could a typical summer crypto storm last for two weeks? That’s the case Bitcoin argues for as it climbed back to $65,000 on Wednesday, after being thunderstruck to $54,000 mere days ago. The world’s premier digital asset managed to turn sales around and catch the tailwinds in its favor – we’re back to roughly 10% of the all-time high, the summit before the peak. But back to those tailwinds that unravel this week’s Big Idea:

• 🇩🇪 Bitcoin’s recovery turned on like clockwork as soon as the news that Germany may be finished selling BTC holdings came out, reaching over $60,000 on Monday. 
• 🌱 BlackRock CEO Larry Fink, (whose company recently surpassed $10T in AUM) showed love for Bitcoin as a legitimate financial instrument suitable for investment, particularly in times of economic uncertainty and currency debasement. He likened Bitcoin to digital gold and believes its adoption as an asset class will grow. 
• 📨 The 11 U.S. spot Bitcoin ETFs saw $53.35M in net inflows on Wednesday, marking the ninth consecutive day of positive inflows, though lower than Tuesday's $422M. Since July 5, Bitcoin has seen net inflows of $1.91B.
• 🐳 Latest data from IntoTheBlock shows that Bitcoin whales have significantly increased their holdings by 71,000 BTC this week, worth over $4.3B, taking advantage of a price dip to $55,550.

We could go on and on with these little twists that shape the Big Idea this week (we haven’t even reached the whole US presidential election debate that impacts crypto). But by now it should be clear – Bitcoin is a must-have asset, at least according to the world’s largest asset manager.

The Latest In…

All Aboard the ETF Train

The week started with good news from – would you believe it – the SEC, notifying Ethereum ETF hopefuls that trading could commence as early as next Tuesday, pending final regulatory procedures. That prompted BlackRock, Fidelity, 21Shares, Grayscale, Bitwise, and Invesco Galaxy to finalize their S-1 filings with details like management fees.

Additionally, the SEC greenlit 19b-4 forms for Grayscale and ProShares to roll out mini Ethereum ETFs and spot Ethereum ETFs, respectively. It appears we are in the final stages before spot ETH ETFs emerge. Care about some predictions? Citi forecasts Ethereum ETFs in the U.S. could see net inflows ranging around $5B over six months, while Bitwise predicts the launch of Ethereum’s price to take prices above $5,000 by year-end, with further potential if investor interest surpasses expectations.

The Latest In…

Target in Sight – Fire, Next?

Federal Reserve Chair Jerome Powell brought good news too, indicating confidence that inflation is moving towards the 2% target. He also suggested rate cuts could occur before inflation reaches that point. Speaking at the Economic Club of Washington, Powell cited three consecutive favorable inflation readings, which he said “add somewhat to confidence” that inflation is slowing sustainably.

While Powell did not specify when the first rate cut would occur, most economists predict it will be in September, with futures markets also expecting additional cuts in November and December. 

The Latest In…

Congratulations, Gold HOLDers!

We have to give credit to Bitcoin’s competition and the good news for investors. Gold surged to a record on Tuesday as rising expectations of a September interest rate cut increased demand for the precious metal. Gold futures settled up 1.6% at an all-time closing high of $2,467.8 per ounce, also reaching a new intraday record of $2,474.5. Spot gold rose 1.9% to $2,468.68 an ounce, marking an all-time high since 1968, though unadjusted for inflation...

This year, gold futures have already climbed more than 19%. After hitting record highs earlier in 2024, prices pulled back due to higher interest rates. However, interest has grown again following softer inflation data in June and dovish comments from Federal Reserve Chair Jerome Powell, leading markets to price in a 100% chance of a rate cut in September, according to the CME FedWatch tool.

The Week’s Most Interesting Data Story

Resilience Illustrated

The chart below is why we’re excited about Bitcoin’s quick recovery. Despite the German government's sale of approximately 49,858 BTC between June 19 and July 12 for $2.8B, Bitcoin has showcased resilience in the face of significant market movements. Securities specialist Bankhaus Scheich was tasked with selling the coins in German fashion – “fair and minimally disruptive to the market.”

Hot Topics

What the Community is Discussing:

A TradFi giant steps into crypto.

Bitcoin is back above the average cost basis of short-term holders!

Is this why Larry Fink is so excited?

What to Watch for Next Week:

• An ATH for ETH?

• Bitcoin Layer 2’ – What’s The Progress?

• Best Altcoins in 2024 So Far?

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