Bitcoin Surge Continues as Stock Tops $72,000
Summary
TLDRThe 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
📈 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.
📊 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.
Mindmap
Keywords
💡Bitcoin ETF
💡Market Cap
💡Supply Shortage
💡Divergent Strength
💡MicroStrategy
💡ETF Flows
💡Professional Money Managers
💡Asset Allocation
💡Market Correction
💡Tether (USDT)
💡Grayscale Bitcoin Trust (GBTC)
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
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