Bitcoin’s IPO
BlackRock’s bullish endorsement of Bitcoin should not be underestimated
Note from our CEO
With volumes up across the board and growing deal flow, we decided to strengthen our operations and are hiring for additional positions. We’re looking for talented and motivated individuals to fill the roles of QA, client services, sales and sales analyst.
If you know anyone interested, please send them our way.
Best,
Yohai Rayfeld
Chart of the month
Bitcoin traded on Wednesday above $73,000, at a market cap of $1.44 trillion. On Monday, the Bitcoin market cap passed silver’s and Meta’s. Today, Bitcoin is one of the world's biggest currencies by market cap and the most easily auditable and transferable one.
Bitcoin hit its previous ATH on November 9th 2021. At that time 777,800 additional bitcoins were yet to be mined, adding $56bn to Bitcoin’s market cap at this price.
Blogs and Feeds
This month, we shared analysis of the changing market dynamics brought on by the new Bitcoin ETFs.
Recently Starship announced our collaboration in which we provide liquidity to support their fundraising ecosystem.
Team update
Anyone going to London? Roei Levav, Efficient Frontier's co-founder, was at ETHGlobal and will be next week at Digital Asset Summit 2024. Our Head of Client Services, Tim Freed, and CTO Alon Elmaliah, will also be joining at DAS.
Please feel free to reach out to sales@efrontier.io if you want to set up a chat during these events.
Efficent Chef. On February 21th some of our team attended an Italian cooking workshop, thanks to the dedicated planning of our office manager GalYaeli Nahum.
Bitcoin’s IPO
If Bitcoin had a CEO this would be its IPO moment. Like gold in 2004, the changes to our markets structure, valuation and perception are likely to be some of the biggest yet. Now, anyone trading in the US markets and soon in The London Stock Exchange will be able to buy exposure to Bitcoin in their bank account.
The first Gold ETF was listed on the NYSE in November 2004. Seven years later, gold peaked at $1,700 with fear of inflation and collapse of the global financial system. Despite the events of the 2008 financial crisis, US stocks kept rising as the Federal Reserve created four rounds of QE (Quantitative Easing- a method of dollar creation).
The official Federal Reserve balance sheet has grown from $0.87 trillion in 2007 to $7.63 trillion today. QE1 in 2008 reached $2 trillion, QE2 0.6 trillion, QE3 $4.5 trillion and QE4 in 2020 $2 trillion.
Inflating the dollar system
For the last 10 years, capital that would have gone into gold before the invention of Bitcoin in 2009, has flown into the crypto markets. Total cryptocurrency market capitalization grew from $1.6bn in mid-2013 to $2.7 trillion. About 50% of this is Bitcoin, by far the most liquid crypto assets.
Since a low of $618 in 2008 gold's market cap roughly tripled, adding $10 trillion. But gold has stagnated since 2014, when Bitcoin started coming into its own, with for example, the launch of BitMEX’s perpetual BTC swaps.
From 2008 to 2024 the S&P 500 increased by 880%, representing a market cap increase of about $30 trillion. During these years inflation soared, as the United States’ GDP (Gross Domestic Product) grew by less than 40%. In our opinion this difference between real economy growth (GDP) and stock prices, is due largely to monetary inflation.
As Global assets and currencies led by the US dollar continue to inflate, the CEO of BlackRock said this week that Bitcoin is digital gold and that it is bigger than any government. Would it be trite to say that the sky's the limit for now?
How high
Our 2020 blog post “Entering the Greed Zone” reviewed what happened the last 3 times (now 4) after clean breaks of the former all-time high in BTC. Basically, some kind of blow off top played out again and again as Bitcoin has ballooned and went from millions to billions and now trillions.
Now is the first time since 2012 (when one Bitcoin traded in single to double digits) that the all-time high price was broken before the halving, which is still over a month out. This hints at how unique this Bitcon cycle may turn out. BlackRock’s endorsement of Bitcoin should not be underestimated.