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Bitcoin is positioned to increase in value rapidly in the coming months.

I didn’t own any BTC the day before writing this post, but after taking a look at the following information, I entered a position today in anticipation of Q1 2024. Why?

A spot ETF is a type of investment fund that lets you invest in assets like Bitcoin or gold at their current market prices, without having to actually own the physical asset.

Blackrock and other large firms have been pushing the SEC to allow for Bitcoin and Ethereum spot ETFs, which would allow a huge amount of capital from traditional finance to enter the space. That link provides insights into several indicators that suggest the SEC may be on the verge of approving a batch of BTC/ETH fund applications:

iShares BTC and ETH Trusts… I never thought I’d see the day…

Blackrock is suspected to own over 100,000 BTC (~$3.7B), as well as major ownership in 4/5 of the largest Bitcoin mining operations. The implication of mining ownership is that Blackrock sees long-term value in BTC and is interested in long-term exposure. There’s no doubt that the introduction of a spot ETF would catalyze an influx of speculative investment from various firms, especially considering the advantages of professional custodians securely managing and trading the assets on behalf of customers.

Spot ETFs make it easier for individual investors to gain exposure to a new asset class without the need to directly purchase, store, or manage the underlying assets. This is particularly important for asset classes that are difficult or impractical for individual investors to hold directly, like digital assets. Lower risk == higher value.

A spot ETF offers higher liquidity compared to directly trading the underlying asset. Increased liquidity == higher value.

If you’re looking for more reasons to be bullish on BTC:

• The upcoming Bitcoin halving reduces the generation of BTC (by 50%)

• BTC is a supply-limited asset in a future of infinite AI competition

• BTC is borderless and acts as a hedge against governments’ fiat (aka non-backed, ‘printable’ money)

• The BTC network is seeing an unprecedented increase in usage

Blackrock is interested in the future of asset tokenization, and digital asset ETFs are a critical first step in creating value in a new domain where they can set the rules. There’s immense potential value in reducing risk and increasing liquidity across a variety of asset classes, such as real estate, art, supercars, and even tokenized ETFs.

Here’s the order of operations:

1. Digital asset ETFs are approved, value flows in as a speculation/hedge…

2. Crypto markets expand globally, becoming a small part of many investors’ portfolios

3. Digital assets are continually implemented and expanded upon

The market caps of BTC and ETH can roughly be compared to gold/silver as an international hedge & borderless medium of exchange. BTC’s market cap is ~$740B. Silver’s market cap is ~$1.4T. Gold’s is ~$13.6T.

Would it be unreasonable for BTC to double in value, surpassing silver? What about gold? My bet is that BTC (and especially the crypto market as a whole) will blow past these as the value proposition of supply-limited and government-resistant assets is increasingly discovered, and the difficulty of interacting with these assets decreases.

Additionally, compared to metals, digital assets are cheaper to store, and fractionalize. In my opinion, the value proposition is promising.

Finally, crypto has a unique value proposition of being instantly-settled. It makes sense that in a world of increasing speed and technological innovation, the fastest medium of exchange offers enormous opportunity.

Up or down, I’m strapped in for the ride. Let’s see how this position pans out…