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Analysts' Insights

Analysts' Insights

Divergences: Blackrock, Bitcoin & Binance

👇 1) Divergences in the financial markets often provide clues about new trend formations. There are now various themes developing that we should that notice of.

👇 2) While most trolled Blackrock for now submitting its application for a Bitcoin ETF - in 2017, the firm’s CEO, Larry Fink, voiced his strong disagreement with the value proposition that Bitcoin offers.

👇 3) But imagine if the SEC approves Blackrock application – what would that mean?

👇 4) Anecdotal evidence shows regulators actively engage with established financial institutions to provide secure and controlled crypto trading platforms. The number one takeaway from my book (Crypto Titans) is that crypto will not just disappear. No matter if you believe in blockchain, cryptocurrencies, or not in crypto at all.

👇 5) There are now 420 million cryptocurrency holders; migrating them to regulated entities might be the most significant task in 2023 mainly because fighting those crypto companies with deep pockets is also very time-consuming for regulators. Ripple Labs has spent $200m on its lawsuit with the SEC, while Coinbase, especially Binance, could spend billions. So why not approve the Blackrock ETF and let nature play is part?

👇 6) If history is any guide, crypto trader migration always tends to happen when a token (or an exchange) is in trouble with the regulators and we see the divergence occurring already. See Binance's BNB vs. Bitcoin. Maybe just temporary? Perhaps a critical development...

👇 7) During all four crypto bull markets of 2011, 2013, 2017 and 2021, the one constant was that Bitcoin always made new highs. We can not say this for the tokens that were “hot” during those bull markets. Most of the 2017 darlings never regained their 2017 peaks again.

👇 8) Therefore, expecting Bitcoin to make a new high during the next bull market (2024/2025) makes sense, while most others won’t. This is because a different theme drove each bull market and a new crypto investment thesis will surely emerge.

👇 9) Let’s assume the Blackrock Bitoin ETF gets approved by September / October 2023, we expect to see $1bn of inflows within the first week and $10bn over the next three months. Sure, the Bitcoin ETF in Canada has failed to attract new capital this year but a US-listed ETF is a different ball game.

👇 10) Hence, this Blackrock Bitcoin ETF filing set the floor for Bitcoin at $25,000 and in a bullish (risk-on) macro environment with stocks rallying this year, Bitcoin could start to catch up.

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