(Any views expressed below are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.)
It’s quiet…too quiet.
I don’t know why but it has felt like a long week. A good week though. A historic week actually. I couldn’t help but think back to an old newsletter I put together called Bitcoin in Uncharted Territory After Smashing Through Previous ATHs—and here we are again. I keep finding myself saying that this quarter feels a lot like Q4 of 2020. Not only was it an election cycle, but Bitcoin was also laying down a strong foundation of price action and good news.
Much like back then, we’re also seeing a very dovish Fed which is creating a “perfect storm” for the market. The election result was so monumental that I barely recognized the Fed cutting 25 bps yesterday. It was actually the first FOMC presser that I’ve missed since…probably this time 4 years ago. This time, just like the last time, I feel like the good news is mostly falling on deaf ears. We’re just now noticing signs that our individual (HNWI) client base has started to perk up. So far this year, it has been all about institutional flow which has been awesome, but I feel like we’re slowly bubbling up to what could be a wild run.
If you want to take a trip down memory lane (and see how rough my early writing was), you can check out the original post here.
Let’s dive into what’s making this feel like a familiar and exciting chapter for this space.
Well, actually nothing really feels familiar at all because after Trump’s blowout sweeping victory, crypto is essentially legal now and we’re at levels that “no one’s ever seen before!”
Whether you are in support of Trump or not, Wednesday was a pivotal day for crypto, possibly the most defining moment in its history. The pro-crypto candidate took the presidency, while crypto-friendly figures won key seats, including Bernie Moreno in Ohio, ousting Sherrod Brown, one of the most vocal anti-crypto senators. A staggering 257 pro-crypto representatives were elected into key positions across the political landscape. What we’re seeing is the full-scale embrace of crypto by the U.S. political system, a shift that will bring serious change.
If you look at Trump’s team, he has laser eyed support coming from some of the most influential figures in finance, technology, and politics—RFK, Peter Thiel, Howard Lutnick, JD Vance, and Elon Musk. When those gathered around the table are at the very least, openly supportive of the crypto industry, you have to expect massive leaps forward for the industry.
What’s next? Over the coming weeks, we’ll see significant regulatory shake-ups at the SEC, FDIC, and OCC. These appointments will define the tone for crypto regulation in the U.S. This likely includes repealing SAB 121, the restrictive rule that has kept traditional finance giants out of crypto custody. If institutions like BNY Mellon and State Street are allowed to hold crypto on their balance sheets, we’re looking at a tidal wave of institutional adoption.
Good riddance to SEC Chair Gary Gensler who Trump promised to fire on day 1.
Ah, refreshing.
Obviously, this is one of the most bulled up letters I’ve ever wrote, but it’s hard to contain how optimistic I feel. Crypto has been vilified since I joined the space professionally in 2017. There have been some amazing times for sure, and yeah, we’ve made some money along the way. However, there has been equally or even greater tremendously difficult times. For the first time, a weight that I forgot I was carrying feels lifted.
Let’s imagine the scenario (which I feel is going to happen regardless, just a matter of time) — there is now a non-zero chance that a strategic reserve of bitcoin is created in the US over the next 4 years. If this happens, even if there’s a hint that this is going to happen, other countries are going to move first. The game theory is nuts. We’d be talking about a complete repricing of Bitcoin. This is how we track to supplement or maybe even fully replace gold on central bank balance sheets.
At least we know these coins won’t be hitting the market any time soon…pretty nice starter kit.
If you want to hear me talk shop for 30 minutes or so, here’s our Q4 Market Outlook Call from last week — I highly recommend at least 1.25x playback speed.
I think we’re in for headline worthy pieces of good news week-after-week for the next 12 months or so. There are probably too many catalysts that I’m not even thinking about. I’m sure I will not run out of things to write about.
I’m not sure if or where this fits in this newsletter but it got me going so I’ll just leave this here…
Have a wonderful weekend 🫡