Got this epic email from Swan just now…amazing company
Bitcoin’s price exploded higher this week. It’s up over 5% today and up over 10% this week.
Why is Bitcoin’s price pumping?
While it’s hard to say what exactly moves the price, here are 4 catalysts for Bitcoin that have likely contributed:
1. Over $2 Billion has flowed into ETFs while GBTC outflows have declined significantly.
We’ve seen 10 straight days of net inflows.
Volume into the ETFs has been staggering, as institutions like BlackRock and Fidelity continue to market them heavily to the general public.
2. Hodlers are in control: 80% of coins have not moved in the last 6 months.
Bitcoin supply on exchanges has fallen to a level we haven’t seen since 2018.
The Bitcoin halving is coming in just a few months which will reduce Bitcoin’s issuance rate below gold’s inflation rate.
We all know what happens when a decreasing supply meets increasing demand…
3. Institutions are buying in a major way.
On January 18th, Jim Cramer tweeted that “almost no one is showing up" to buy the ETFs. Since then, the price of Bitcoin has risen over 15%.
The reverse Cramer indicator strikes again!
BlackRock and Fidelity have proven that claim wrong by adding over $3B into their funds in less than one month, making them the two most successful ETF launches in history.
Top ETFs of all time_after 1 month_Bloomberg.png
Blackrock and Fidelity are both fighting for the top Bitcoin ETF. Interestingly, both can manufacture demand by adding Bitcoin to their other products.
This week Fidelity added their own spot Bitcoin ETF to one of their “All-In-One” portfolio funds which gives their customers a 1-3% allocation to Bitcoin. Imagine what happens when this becomes the norm for portfolios in the US.
MicroStrategy increased their Bitcoin treasury to 190,000 total Bitcoin.
The world’s largest Bitcoin miner, Marathon Digital Holdings, sold no Bitcoin in January and added 183.5 BTC to its treasury.
4. Jerome Powell acknowledges an unsustainable fiscal path and indicates money printing coming soon.
In a recent interview on 60 Minutes, Fed Chair Jerome Powell said the US is on an unsustainable “fiscal path.” The US government is printing debt faster than they can monetize it.
He acknowledged that there will likely be regional bank failures in 2024.
Powell said all 19 Federal Board members agree it will be appropriate for the Fed to cut rates in 2024.
As shown in the chart below, Bitcoin’s price is positively correlated to global M2 money supply. When the Fed has printed money, the price of Bitcoin has gone up.
Investors are being rewarded for buying and holding Bitcoin versus trading the news.
Thank you,
Swan Team
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