Welcome to the stack off
This week, bitcoin's dollar-exchange rate continues its upward climb toward $100,000, capturing headlines and igniting conversations across boardrooms and dinner tables.
The other biggest financial markets story this week is MicroStrategy’s meteoric stock price. MSTR is up almost 600% YTD, and it has joined the Top 100 publicly traded companies, surpassing Nike and Dell. Yesterday, it was the most heavily traded equity – with more volume than Nvidia or Tesla.
Once a relatively obscure business intelligence firm, MicroStrategy has remade itself into a bitcoin holding company. It has transformed its market valuation and positioned itself as a trailblazer for other corporations.
The ripple effect is undeniable. Inspired by MicroStrategy's success, more companies are now allocating portions of their balance sheets to bitcoin. They're recognizing what many who have taken the time to learn about bitcoin have long believed: it is pristine capital. This realization is fueling a competitive rush to acquire bitcoin, inviting a "stack-off" as corporations, individuals, and even sovereign nations vie for a place in the future economy based on a Bitcoin Standard.
JUST IN: Michael Saylor to present to the Microsoft Board next month about buying #bitcoin for its treasury. pic.twitter.com/zOY29DyoGA
— Bitcoin Magazine (@BitcoinMagazine) November 19, 2024
NEWS
🟠 More companies announce bitcoin acquisition strategy
An increasing number of companies are allocating portions of their treasury to bitcoin, signaling a notable shift in corporate finance.
Hoth Therapeutics and Acurx Pharmaceuticals are each investing $1 million in bitcoin, citing its growing acceptance as a major asset class.
Solidion Technology is committing 60% of its excess cash to bitcoin, viewing it as a strategic hedge against inflation and a store of value.
Interactive Strength, Inc. plans to allocate up to $5 million to bitcoin and will begin accepting bitcoin payments from customers.
Genius Group has increased its bitcoin holdings to 153 bitcoins, committing 90% or more of its reserves to the asset.
Michael Saylor explains why this sudden change in corporate finance is taking place in the excellent interview below.
📉 ETH underperforms as bitcoin ascends
The Ethereum Network’s token, ether (ETH), has significantly underperformed compared to bitcoin this year. While bitcoin surged 109% to new all-time highs above $90,000, ETH has risen only 36%, currently trading around $3,100, well below its 2021 peak of $4,832.
Market sentiment reflects this disparity. Options data from Amberdata indicates that traders assign just a 10% probability of ETH reaching $4,000 by the end of December. In contrast, there's strong optimism for bitcoin, with bets on the exchange rate surpassing $100,000. Most attribute this to the fact that there's no reason to hold ETH outside of using it within the Ethereum ecosystem. Unlike bitcoin, ETH lacks the monetary qualities that would make it a compelling store of value or provide it with a monetary premium.
Looking ahead, ether faces challenges that may limit its near-term growth, while bitcoin continues to attract investors in digital sound money:
Are altcoins securities? New lawsuit against SEC may decide.
Crypto.com filed a lawsuit against the U.S. Securities and Exchange Commission (SEC), seeking a declaratory judgment that tokens traded on its exchange are not securities. The exchange contends that these tokens were not created through investment contracts and fall outside the SEC's jurisdiction. This legal move comes amid the SEC's stance that many altcoins are securities that are subject to its regulations.
A pivotal case?
The outcome of this case could significantly impact the crypto (not bitcoin) industry by clarifying whether altcoins are considered securities under U.S. law. A ruling in favor of Crypto.com may limit the SEC's reach, while an unfavorable decision could lead to stricter oversight of altcoins by the agency.
Gensler out
In addition to the lawsuit, industry antagonist SEC Chair Gary Gensler announced he will be stepping down from his role as of January 20th. The candidates floated to replace him are all pro-bitcoin and crypto more broadly. See this Axios article for a deeper dive into the current candidate's backgrounds and positions.
🏛️ Trump considering new White House role focused on bitcoin
President-elect Donald Trump's transition team is reportedly discussing the creation of a new White House position dedicated solely to bitcoin and crypto policy – the first of its kind in U.S. government. Candidates are being vetted during meetings at Mar-a-Lago. However, it's unclear if the role would be a staff position or a "bitcoin/crypto czar" coordinating efforts across federal agencies.
The appointee would manage a small team and act as a liaison between the President, Congress, and regulatory bodies like the SEC and CFTC. Industry figures like Coinbase CEO Brian Armstrong have reportedly met with Trump to discuss bitcoin policy.
BITCOIN ADOPTION CONTINUES
US customers can now purchase a Bitkey, Block's bitcoin hardware wallet, online at Amazon and Best Buy.
Polish presidential candidate Sławomir Mentzen proposes creating a Strategic Bitcoin Reserve to position Poland as a global bitcoin leader if elected in 2025.
Jippi is launching "Tribe Clash," a Pokémon GO-inspired game designed to gamify bitcoin education and promote widespread adoption.
U.S. bitcoin ETFs have surpassed $100 billion in net assets and are on track to overtake gold ETFs.
Mara Holdings raises $1 billion through convertible notes to acquire bitcoin and repurchase debt.
HOW BITCOIN WORKS
Learn one key idea about bitcoin each week. This week:
Why 2024 will be remembered as the year bitcoin went mainstream.
The year 2024 will be remembered as when bitcoin became a mainstream financial asset. The momentum is undeniable, with its dollar-exchange rate soaring past $90,000 and poised to break the $100,000 barrier before the year is out. Several key events have converged to make this year a watershed moment.
In January, the U.S. Securities and Exchange Commission approved 11 spot bitcoin ETFs, marking a shift in the agency’s regulatory stance. This generated billions of liquidity putting positive pressure on bitcoin's dollar exchange rate.
Institutional adoption surged as major financial institutions embraced bitcoin like never before. BNY Mellon received SEC approval to offer custody services. BlackRock's iShares Bitcoin Trust gained approval for spot bitcoin ETF options, paving the way for increased liquidity and more sophisticated strategies.
Corporate pioneers also played a crucial role in this transformation. MicroStrategy announced an ambitious plan to raise $42 billion over three years to invest in bitcoin, aiming to solidify its position as a leading corporate holder of the asset. Inspired by such moves, additional companies have allocated significant portions of their treasury reserves to bitcoin.
In a historic turn, President Trump was re-elected as the first pro-bitcoin president of the United States. His administration has shown support for bitcoin adoption, with Senator Cynthia Lummis proposing a strategic bitcoin reserve.
Globally, state pension funds and major banks in the U.S. and Canada began allocating assets to bitcoin ETFs.
As we approach the end of the year, with bitcoin on the cusp of breaking the $100,000 milestone (surpassing silver and Saudi Aramco in market cap), it's clear that 2024 will be remembered as the year bitcoin went mainstream. The bullish outlook continues into next year, supported by increased institutional adoption, friendly regulators, and growing public interest.
COIN CHECK
When did Michael Saylor’s MicroStrategy begin accumulating bitcoin?
February 2021
August 2020
April 2022
February 2022
Check your answer at the end of the page.
FROM THE MEME POOL
Tulips are not durable, not scarce, not programmable, not fungible, not verifiable, not divisible, and hard to transfer. But tell me more about your analogy...
— Naval (@naval) December 9, 2017
ANSWER
August 2020.
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