'Bitcoin' might soon be $380

BIT Crypto Exchange 08.Mar.2024

“If we're not monsters, we're food.”
- Sully

'Bitcoin' might soon be $380

Bitcoin finally tapped $69,000, surpassing the previous high set in November 2021. As we discussed in last week’s note, it marks the first time we’ve reached a new all-time high in a cycle before the halving. The Newborn 9 ETFs play a huge role in this.

There’s simply more appetite than we expected, and it’s only the first inning; there’s gonna be a lot more winning.

BTC ETFs have already drawn in $8.6 billion to date, a monumental yet miniscule figure. What felt like a flood is only a tiny 0.1% drop in the ETF bucket which has a total of $7 trillion AUM across all sectors.

What if it trickles to 1%, or swells into a 10% torrent? It’s all in the cards. Remember that registered investment advisors (RIAs) need at least 3 months to get approval to sling new ETF recommendations. This is only the beginning.

Orange juice

The BTC ETF is often compared to the Gold ETF to decide if we feel good about the progress or not. While that works for looking at the history of ETFs, let's compare oranges to oranges instead and look at a different moment in time when we saw a significant change in Bitcoin's retail distribution channels.

In July 2010, Ol’ Dirty Bitcoin was trading for about 0.7 cents, until it suddenly gained 10x in 5 days, followed by a 1000x shimmy-shimmy-ya over the next 2 years. Why? Largely because it was the very early days and we were in the most extreme form of price discovery. But something else changed: Bitcoin was introduced to global liquidity, with the opening of MtGox.

With ETFs, Bitcoin is now listed on the world's stock markets, which weighs about $100 trillion on a given day. It is the biggest and most crucial IPO in history, and we all know what some of these techy stocks have done over the last few years.

But you say, “Oh no, we can't 10x a coin that's already $69,000. The computers can't handle it, people would cry."

Fine. First of all, it doesn't have to happen this cycle, and second of all, it could also 20x.

Have you met Unit Bias?

Give a dog a bone

Unit bias affects how people assess the value and growth potential of something based on the unit price instead of fundamentals.

In crypto, that's why people go from "Ethereum could be interesting, but it's expensive. I'll buy [insert layer 1 token] which has a lower unit price instead cos it can still 20x to catch up with ETH.”

It's also why people buy tokens that insist to exist with no reason to be. Sure, you can buy 1 Soldano with $145 or...How much is that doggy in the window? You can get 75 dogs wif hats or 9000 Samos for the same money.

With Bitcoin, people have tried to transition to sats as a unit, but so far that hasn't really worked out. We've spent too long looking at full Bitcoin numbers. Buying Bitcoin with $38 dollars to net a clean 0.00057762 is perhaps not the most satisfying. But 57762 sats also doesn't mean jack squibbles to anyone.

In the ETF world however, unit bias has the power to put some extra zing in this bull run.

That’s because that same unit bias applies to Mr and Mrs Boomer faxing travellers cheques to their advisor to acquire statements that they now have price exposure to Bitcoin. A single share of Blockrock's IBIT ETF is trading at $38 today, and ETFers have higher numbers in mind for the near future.

They've heard of the infamous volatility, how it's immune to the pathologies that have debased our fiat, and it's already made huge gains in the past...it could just go up all the way to $380 dollars. I mean, NVDA did 10x in 4 years, why can't this Ol' Dirty Bitcoin shimmy its way up as well?Keep in mind that while BlockRock et. al. buy record numbers of Bitcoin to feed the ETF machine, there's only about two million BTC available for sale on exchanges and miners will start 'producing' less coins in a few weeks.HODLers aren't monsters of course. They will take some coinage out of cold wallets to spread the joy, but it comes at a price. They're gonna eat well.

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