#208: Why Bitcoin's Up 120% YTD

• Bitcoin (BTC) has risen 35% (up to almost $37k) in the past month and 120% YTD (year-to-date), as of writing

• To me, it’s confusing at first, because of the whole negative sentiment around crypto in general that has grown recently (i.e. SBF) and high rates was no good news for extra risky-and-volatile assets like crypto

• Let’s take a look at some theories around why-the-rally

Rocky past two years

BTC has reached its highest level since May 2022

• The two big bad news were the TerraUSD stable coin scam and the collapse (and fraud) of FTX

• Two recent big news are that BlackRock (one of the world's biggest asset managers with $9.4tn in AUM) filed for a spot Bitcoin ETF and Grayscale's victory over SEC in court

Hypotheses

1. Spot Bitcoin ETFs will soon be approved by US regulators

2. Investors will be able to buy and sell Bitcoin through a brokerage account like they do with stocks, instead of opening a "wallet", which will reduce the friction-to-entry investors had before (especially those unfamiliar with crypto)

3. It won’t be just BlackRock, a mass of brokerage firms will allow Bitcoin ETFs on their platforms

4. "Spot" here refers to the fact that, theoretically, the share value of the ETF will move in-line with the price of Bitcoin itself (very much like the S&P500 ETF's movement). This will shed more transparency onto the price movements of these spot Bitcoin ETFs, reducing extra variance or risk on investor’s expectations

👉 All these point to the signal (or simply potential) that crypto (at large) is heading towards to a steady commercialization - hence, the recent rally in crypto-related stocks like MicroStrategy, Marathon Digital Holding, Riot Platforms, and Coinbase.

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