You are not bullish enough on Bitcoin 🚀

16 Dec, 2023

Talal Tabbaa

Author

Over the past 12 years, bitcoin has been the apex predator of all asset classes, delivering an outstanding 150% annualized return from 2011 until today. If you don't have bitcoin in your portfolio you might think you missed the boat, or counter with “past performance is not indicative of future performance” Fair enough. However, recent developments lead me to believe that the future of bitcoin, is even more bullish than its the past, and here’s why:

The institutions are coming: Bitcoin is still in the very early stages of adoption. The market price has been largely determined by individuals and a handful of companies. However, BlackRock, Fidelity, Charles Schwab, Citadel, Deutsche Bank, Nomura, and Frank Templeton have all filed applications for a spot #bitcoin ETF, which is likely to be approved in Q1 of 2024. This introduces a whole different scale of market players. The seven asset management firms I just listed alone collectively have $25 Trillion in assets under management (AUM). If they allocate just 1% of their AUM to bitcoin (won’t happen overnight), that would be ~$250 billion of buy pressure, equivalent to roughly ~30% of the total market capitalization of bitcoin.

New Accounting Regulations: The new Financial Accounting Standards Board (FASB) regulations coming into effect in 2024 will require crypto assets, including bitcoin, to be measured at fair market value. Previously, many companies were hesitant to add bitcoin because it was classified as an intangible asset, and only unrealized losses, and not unrealized gains, could be disclosed in earnings.

Time to get off ZERO!

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Even if we ignore other bullish factors like the Bitcoin halving (April 2024) and the Fed ending quantitative tightening, the news of the ETF and new FASB regulations alone are a clear signal that Wall Street is coming, and you are not bullish enough!