MicroStrategy Bought $1.4 Billion Bitcoin

Hey, it’s Archie!

Record Bitcoin ETF inflows one day, record outflows from Grayscale the next, Saylor keeps buying, and some huge price swings after breaking new all-time highs!

Let’s dig in! 🙌

🚨Today’s Issue

• MicroStrategy Buys Another $625m Bitcoin

• Bitcoin ETF Trading Update

• Bitcoin Breaks $73,000

NEWS

Bitcoin Snippets

• Bitcoin ETFs: Approved on Wealth advisor platform Cetera with $475 billion in assets under administration and $190 billion in assets under management.

• El Salvador: Moved $406m Bitcoin into cold storage vault on their national territory.

  

• JP Morgan: Bitcoin has already surpassed Gold in investor portfolio allocations.

• United Kingdom: Financial Times reports that Bitcoin ETFs will list in the UK but only available to “professional investors”

• Standard Charted: Global bank raises Bitcoin price target to $150K this year and $250K for 2025, saying “the gold analogy remains a good starting point for estimating the ‘correct’ Bitcoin price level"

  Gold market cap = $14 Trillion

  Bitcoin market cap = $1.4 Trillion

  Bitcoin at $680,000 would equal Gold's market cap.

• BlackRock and Fidelity: Both Bitcoin ETFs are in the top 5 ETFs for inflows this year (among all ETFs) The other 3 ETFs in the top 5 have HUNDREDS OF BILLIONS in assets and have been operating for many years.

• Japan: The world's biggest pension fund, Japan's $1.4 Trillion Government Pension Investment Fund, is looking into buying Bitcoin as part of its diversification strategy.

• Grayscale Bitcoin ETF: CEO says fees will be reduced.

  “…over time, as this market matures, the fees on GBTC will come down.”

• Coinbase is the custodian for 8 of the 10 Bitcoin ETFs, including BlackRock’s, so it’s no surprise that they hold most of the BTC on behalf of the ETF issuers. It presents a security risk to the issuers, and new custodians will likely enter the market over time.

• Robinhood: Launches Bitcoin and crypto wallet on Android for all users around the world.

MICROSTRATEGY

Michael Saylor Buys Another $625m Bitcoin

• MicroStrategy bought more than $1.4b Bitcoin in just 10 days.

• It officially owns more than 1% of all the Bitcoin that will ever exist.

• MicroStrategy now hodls 214,246 BTC at an average price of $35,160.

• Total investment so far is $7.5B

• Market value investment is $13.5B

• Profit on position = $6b

The convertible notes have extremely good terms:

• 7 years to maturity (2031)

• Interest rate under 1%.

This gives MS virtually free money for 7 years, in what could turn out to be 2 bull market cycles, at zero risk of liquidation (unlike leveraged trading).

If you believe Bitcoin is at the beginning of a long run of mainstream adoption, then this is simply a no-brainer.

Now, where do I get the same deal! 🤑

BITCOIN ETFs

Bitcoin ETFs Break Record Inflows, But Grayscale Outflows Continue

Bitcoin ETFs are having a rollercoaster ride, breaking record inflows and outflows in consecutive weeks.

Last week Bitcoin ETFs had the first +$1b day and pulled in a massive $2.9b in 5 trading days.

This week, we saw a record $835 in outflows, led by Grayscale’s continued bleeding of BTC, losing $1.9b in a single week.

It’s a tale of the giants: Grayscale Outflows vs BlackRock+Fidelity Inflows.

It’s not so much that Grayscale outflows increased by any significant amount, but inflows declined substantially. Take a look below.

Clearly inflows (green) from the two industry giants have fallen off a cliff at the same time that Grayscale outflows spikes.

I remain convinced that this will reverse in quick time.

Grayscale redemptions have surged because of bankruptcy liquidations and probably some profit taking by long-term holders.

On the flip side, inflows probably slowed due to the parabolic move in the Bitcoin price, and of course, markets do have natural cycles of price spikes and corrections. Especially. bull markets.

Inflows are expected to gain further strength from a number of factors:

• Bitcoin price stabilising when correction finds a bottom.

• More wealth advisor platforms onboarded each week.

• Brokerages offering the Bitcoin ETFs on their platforms.

Anecdotal evidence from ETF issuers suggests merely 10% of investment platforms offer Bitcoin ETFs at the moment, and even then, few advisors are actively allocating to the BTC ETFs.

BULL MARKET

Bitcoin Breaks $73,000

Few believed Bitcoin would break a new all-time high before the halving mere weeks ago, but it found a lot of buying strength amid ETF fund flows.

We are now in the middle of a correction, which is currently -15% off the top price as I type this.

Predictably, the bears are out celebrating once again.

If you are new to Bitcoin, this sort of volatility is perfectly normal during bull markets.

The best illustration of this was the 2017 bull market, which had numerous 20-40% corrections along the way.

The good news?
Every time Bitcoin has broken the previous cycle’s all-time high, a parabolic run has followed soon after.

Nothing is guaranteed, but history suggests a high probability that Bitcoin goes up from here.

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Cheers,

Archie

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