Bitcoin Surge Continues as Stock Tops $72,000

Summary

The discussion highlights Bitcoin's growing presence in ETFs, with a current total of $70 billion compared to gold's $184 billion. It emphasizes Bitcoin's divergent strength against the S&P 500 and addresses the supply shortage despite high trading volumes. Tether's trading volume is noted, surpassing Bitcoin's, and MicroStrategy's significant investment in Bitcoin is mentioned, with its stock outperforming Bitcoin itself. The narrative also touches on the increasing interest from professional money managers and the potential for Bitcoin as a long-term investment strategy, comparing its growth to that of other ETFs and its resilience to market corrections.

Takeaways

• 📈 Bitcoin in ETFs currently tracks around $70 billion, compared to gold's $184 billion, showing significant inflows and a supply cut.
• 💪 Bitcoin is exhibiting divergent strength against the S&P 500, especially noteworthy given the recent market downturn.
• 🤔 Despite a supply shortage, Bitcoin continues to see tens of billions of dollars in daily trading, highlighting its market resilience.
• 💰 The high price of Bitcoin acts as a deterrent for increased supply, a phenomenon common among commodities except for gold.
• 🔄 Tether (USDT), a stablecoin pegged to the US dollar, has double the trading volume of Bitcoin, with a market cap of over $12 billion.
• 📈 MicroStrategy's investment in Bitcoin has led to a significant increase in its stock price, up almost 600% in a year.
• 🏦 The biggest winner in the ETF market is Grayscale, with its Bitcoin Trust (GBTC) holding around $28 billion, followed by Tezos' Bitcoin Trust with $13 billion.
• 💡 Professional money managers are showing increasing interest in Bitcoin, signaling a shift towards institutional adoption.
• 📊 Bitcoin's market performance is unprecedented, breaking records compared to other ETFs like GLD (gold) and SPY (S&P 500).
• 🚀 The early days of institutional investments in Bitcoin are expected to continue with strong inflows, similar to the early stages of other ETF markets.
• 📉 The lack of a significant market correction in the S&P 500 raises concerns, but Bitcoin's response to potential downturns may be met with increased buying interest.

Q & A

What is the current total amount of Bitcoin in ETFs?

The current total amount of Bitcoin in ETFs is about $70 billion.

How does the market value of Bitcoin in ETFs compare to gold?

Bitcoin's market value in ETFs is approximately 40% of gold's value, which is around $184 billion.

What is the significance of Bitcoin showing divergent strength versus the S&P 500?

The divergent strength indicates that Bitcoin is behaving differently from traditional markets, potentially acting as a hedge or an alternative investment in times of market downturns.

How does the high price of Bitcoin affect its supply?

The high price of Bitcoin does not encourage an increase in supply, unlike other commodities. This is known as the 'high price cure'.

What is the most widely traded asset in the cryptocurrency space?

The most widely traded asset in the cryptocurrency space is the US dollar, specifically in the form of Tether (USDT), which is the number one traded token.

How has MicroStrategy's investment in Bitcoin impacted its performance?

MicroStrategy's investment in Bitcoin has led to a significant increase in its value, with a 600% rise over a one-year period compared to Bitcoin's 230% increase.

Which ETF provider is currently the biggest winner in terms of Bitcoin ETF flows?

Grayscale is the biggest winner, with its Grayscale Bitcoin Trust (GBTC) holding about $28 billion, followed by the Tezos (XTZ) Bitcoin Trust with about $13 billion.

What does the future of institutional investment in Bitcoin look like?

The future of institutional investment in Bitcoin appears promising, with pension funds and endowments starting to allocate a percentage of their portfolios to Bitcoin, beginning with 1% allocations.

How might Bitcoin respond to a significant market correction?

While Bitcoin might initially go down during a market correction, it is expected that responsive buyers will be greater, leading to a potential increase in Bitcoin's value post-correction.

What is the current state of Bitcoin ETF in comparison to other ETF markets?

Bitcoin ETF has broken all records in comparison to other ETF markets, such as GLD or SPY, and has become the benchmark for the industry.

What is the concern regarding the lack of a significant stock market correction?

The concern is that the stock market is overdue for a normal 10% correction, which has not occurred since the low in October. The lack of a correction might indicate an unstable market situation.

Outlines

00:00

📈 Bitcoin ETF Tracking and Market Comparisons

This paragraph discusses the current state of Bitcoin in Exchange Traded Funds (ETFs), highlighting the total tracking amount of approximately $70 billion and comparing it to gold's $184 billion. The speaker notes the significant inflows into Bitcoin, especially around tax day, and its recent divergent strength against the S&P 500. The discussion also touches on the supply shortage of Bitcoin despite high trading volumes, with a focus on the trading volume of Tether (USDT) being double that of Bitcoin. The speaker emphasizes the importance of volume in the cryptocurrency market and mentions MicroStrategy's significant investment in Bitcoin, which has led to a nearly 600% increase in the company's value over a year. The impact of institutional interest in Bitcoin, particularly from professional money managers, is also highlighted, suggesting that we are in the early days of institutional allocation to this asset class.

05:00

📊 Bitcoin's Volatility and Market Response

The second paragraph delves into the volatility of Bitcoin and its potential response to a significant market downturn. The speaker posits that while Bitcoin may experience a decline, the responsive buying interest in Bitcoin could be stronger, indicating a resilient asset. The absence of a significant correction in the stock market is contrasted with the healthy corrections seen in gold and Bitcoin, which are believed to form a solid foundation for future growth. The speaker expresses concern about the stock market being overdue for a normal 10% correction and ponders how Bitcoin might fare in such a scenario, suggesting that Bitcoin could attract greater buying interest even during a market downturn.

Keywords

💡Bitcoin ETF

Bitcoin ETF refers to exchange-traded funds that track the value of Bitcoin, allowing investors to gain exposure to the cryptocurrency without actually owning it. In the context of the video, it is mentioned that the total amount of Bitcoin in ETFs is about $70 billion, highlighting the growing interest and investment in Bitcoin through these financial instruments.

💡Market Cap

Market Cap, short for market capitalization, is the total value of all outstanding shares of a publicly-traded company or, in the case of cryptocurrencies, the total value of all the coins or tokens in circulation. It is calculated by multiplying the current price of the asset by its total supply. In the video, the market cap of Tether is mentioned as being double that of Bitcoin, indicating its popularity and trading volume.

💡Supply Shortage

A supply shortage occurs when the demand for an asset exceeds its available supply. In the context of the video, it is suggested that Bitcoin is experiencing a supply shortage, which could contribute to its rising price. However, the speaker clarifies that the term 'supply shortage' might be misleading, as it is more about the price cure effect where higher prices do not lead to increased supply, a phenomenon typical of commodities.

💡Divergent Strength

Divergent strength refers to a situation where an asset's price performance starts to move in the opposite direction of what was previously correlated with it. In the video, Bitcoin is said to be showing divergent strength versus the S&P 500, indicating that while the stock market index is down, Bitcoin's value is holding strong or even increasing, which is a noteworthy development for investors and traders.

💡MicroStrategy

MicroStrategy is a company known for its significant investments in Bitcoin. The video highlights that MicroStrategy's stock has risen almost 600% on a one-year basis, compared to Bitcoin's 230% increase, indicating the company's successful strategy of converting its treasury to Bitcoin. This move by MicroStrategy reflects a broader trend of companies recognizing the potential of cryptocurrencies in their financial strategies.

💡ETF Flows

ETF flows refer to the movement of money into or out of exchange-traded funds. Positive flows indicate that more money is being invested in the ETF, while negative flows suggest withdrawals. The video discusses the inflows into Bitcoin ETFs, with a particular focus on the winners and losers among the ETF providers, such as Grayscale and its Bitcoin trust fund.

💡Professional Money Managers

Professional money managers are individuals or firms that handle the investment portfolios of clients, including individuals, corporations, and institutional investors. They make investment decisions on behalf of their clients with the goal of growing their wealth. In the video, it is mentioned that these managers are showing interest in Bitcoin, indicating a shift towards including cryptocurrencies in traditional investment portfolios.

💡Asset Allocation

Asset allocation is a strategy used by investors to divide their investment portfolio among different asset classes, such as stocks, bonds, and now, cryptocurrencies like Bitcoin. The goal is to balance risk and reward based on an investor's financial goals and risk tolerance. The video discusses the potential for institutional investors like pension funds and endowments to allocate a small percentage of their portfolios to Bitcoin.

💡Market Correction

A market correction is a decline in the market that usually follows a period of significant price increases. It is considered a healthy part of market cycles, allowing for an adjustment of asset prices and the removal of overvalued assets. The video expresses concern about the lack of a significant market correction in the S&P 500 and ponders how Bitcoin might respond in such an event.

💡Tether (USDT)

Tether (USDT) is a type of stablecoin, a cryptocurrency that is pegged to a reserve of assets, in this case, the US dollar, to maintain a stable value. It is widely used in the cryptocurrency market for trading and as a means of transferring value without the volatility associated with other cryptocurrencies. The video notes that Tether has a higher trading volume than Bitcoin, indicating its importance in the crypto ecosystem.

💡Grayscale Bitcoin Trust (GBTC)

Grayscale Bitcoin Trust (GBTC) is a digital currency investment trust that offers investors exposure to the price movement of Bitcoin without the challenges of buying, storing, and safekeeping the digital currency itself. It is one of the largest and most well-known Bitcoin investment vehicles. The video discusses the significant inflows into Grayscale's Bitcoin trust, which reflects the growing institutional interest in Bitcoin.

Highlights

Bitcoin in ETF tracking is about $70 billion, compared to gold at around $184 billion.

Bitcoin shows divergent strength versus the S&P 500, especially when the index is down.

Despite a supply shortage, tens of billions of dollars in Bitcoin are traded daily.

The high price of Bitcoin acts as a cure, similar to other commodities except gold, preventing supply from increasing with price.

Tether, the number one traded token, is basically double Bitcoin's trading volume on a 24-hour basis.

The most widely traded asset in the crypto space is the US dollar, not Bitcoin.

MicroStrategy's stock is up almost 600% on a one-year basis compared to Bitcoin's 230% increase.

Michael Saylor of MicroStrategy has been a significant influencer in the bullish sentiment towards Bitcoin.

Grayscale Bitcoin Trust (GBTC) is the biggest winner in the ETF space with about $28 billion, followed by Tezos with $13 billion.

Professional money managers are showing increased interest in Bitcoin, indicating a shift towards institutional adoption.

Bitcoin ETF flows have been very strong, with significant inflows, especially from institutional investors.

Bitcoin ETFs have broken all records compared to other ETFs like GLD or SPY in their early days.

Bitcoin's prominence is such that it doesn't require advertising, similar to Tesla, as it's a significant asset that garners attention.

The S&P 500 has not seen a significant correction since its low in October, which is unusual and potentially overdue.

Bitcoin is expected to respond to a potential market correction, but the expectation is that responsive buying will be greater.

The early days of institutional interest in Bitcoin and crypto ETFs suggest a significant shift in investment strategies.

The growth and interest in Bitcoin and crypto ETFs indicate a new era of investment and market dynamics.

Transcripts

right now the total amount tracking

Bitcoin in ETF now is about $70 billion

I compare that to gold which is stuck

around 184 billion it's about 40% so

massive inflows and the having the cut

and Supply basically around tax day it's

a pretty significant sweet spot for

Bitcoin but I find most significant

lately is the fact that Bitcoin is

showing Divergent strength versus beta

with the S&P 500 down this morning yeah

I guess one thing about Bitcoin though

is that is a question about volume we've

got a supply shortage and yet there's

tens of billions of dollars trading

every day how do you square these two

things well it it's not so much a supply

St shortage I guess it just you can see

it coming down it's something that it's

the high price cure that affects all

Commodities with the exception of gold

you don't have that Supply coming on

with higher prices but I love when you

mention volume because I love clicking

on coinmarketcap.com and checking volume

and the the volume of tether the number

one traded token um which is the US

dollar is basically double Bitcoin on a

24-hour basis and it's its market caps

up to 12012 billion so it's one thing

that a lot of people don't know in the

space is Bitcoin is speculative yes it's

a replacement for gold it's a digital

version but in this space the most

widely traded asset is the

dollar when you look at say the

offshoots of crypto like the stocks the

exchanges the miners Etc are they

trading as well as the underlying asset

yes well I guess we have to mention

micro strategy we've all heard Michael

sailor I just saw him on a few other

programs recently on a one-year basis

micro strategy is up almost 600%

compared to bitcoin up up 230% the

significance of him is he's been buying

Bitcoin he's one of the sages that

really got me somewhat bullish a few

years ago when he's pointing out the

history and he says Hey the world's

going digital this is a potentially a

replacement of the dollar not so much

the dollar but of gold and he's been

converting a lot of micro strategy

strategy to buying Bitcoin rather than

doing other things in in technology I

guess but if you go back to your point

that we started out with on the ETF

flows I mean who are the winners and

losers here amongst the ETF providers I

mean is this still a Black Rock versus

everyone else story or is there

something more interesting to think

about there the biggest winner is great

scale um they're the on so we got to

remember when they kind of tilted this

over Michael Shon Stein of great scale

was the one who initiated the litigation

with the SEC and he took a major risk I

call profiles encourage and he won so

right now grayscale um the gbtc the

grayscale Bitcoin trust is about 28

billion and the next is the iour I iar's

Bitcoin trusts about 13 billion but the

thing about iar's Bitcoin trust is that

didn't exist just a few months ago and

gray scale was higher so a lot of that

money has migrated but now it's just net

inflows and I think it's at the stage

that we're hearing this from

professional money managers are tilting

that way and that's what really struck

me when I went to the ETF conference

about a a month ago in Miami Eric

balunis moderated panel and there was so

much interest from these you know I'd

say professional money maners in Bitcoin

well that really that's my question do

if all of a sudden Bitcoin for whatever

reason sort of Tanks 20,000 right super

volatile asset right like no one's

pretending that it's not do those people

that want a 1% allocation in their

portfolio to bitcoin care or is this now

a long Buy and Hold strategy with some

Traders trading around the

volatility well obviously it's the

number one trade I like called the

number one traded asset on the planet

24/7 number one leading indicator Alex

but I think what's happening now is

we're in the early days of the

institutional the raas in Pension funds

endowments getting allocated to this

space they're starting with 1% yeah of

course they care but they're the the

back tests look too good unfortunately I

like to pair it with gold and I think

it's one of those spaces it's it's

either way it goes it's just it's just

the early days of those inflows what

thing really shocked me was I didn't

think there would be that much interest

in the these ETFs and you just got to

follow the money it's very strong

inflows yeah you know as you say it's

early days for this ETF strategy and how

do you compare this to the birth of

other ETFs markets like what can we

expect can we expect a whole lot more

players or is it all going to get weeded

out very quickly that's the thing it's

broken all the records compared to GLD

or even spy the early days it's it's

broken all the records it's it's

basically The Benchmark now for and I

don't think we'll ever be able to match

it the thing is I compare somewhat into

Tesla Tesla pays pays spends nothing on

Advertising they don't have to because

everybody loves Tesla Bitcoin is the

same way there's nothing to advertise it

but it's so in your face it's one of

those things I put on my di list I try

to deliberately ignore but I can't

because you just hear about it and read

about it everywhere so that to me is

what's happening it's just that

significant of an asset at the moment

and at some point yes it should have a

good correction the key thing that's

been bothering me is we've had basically

straight up in the S&P 500 since low in

October no correction the most

significant correction was the first

week of the year is 1.5% but we've had

good Corrections in gold which founded a

good foundation we've had good

Corrections at Bitcoin which formed a

good foundation you know flushes out the

week Longs we haven't had that in the

stock market and that's what I'm afraid

we're way overdue for it just a normal

10% correction you know like used to

happen how does Bitcoin respond in that

space and I think what's happening now

sure it should go down but we think the

responsive buyers will be greater in

Bitcoin