Bitcoin is about to make some waves.
What was once framed as a pathway to freedom is now falling into the hands of the established system. This means the freedom narrative is dead. That said, for those who are holding the coin, or something related to it, massive gains might be arriving in the future.
We are seeing a lot of activity. In just the past few days, a few announcements came out which showed how things are progressing.
The bottom line is that confidence in Bitcoin is growing. This has nothing to do with utility, structure, or anything fundamental. With assets, it ultimately comes down to the trust and confidence people have.
For Bitcoin, this appears to be growing.
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The Bitcoin Boom
Could be see a massive boom for Bitcoin? By this I mean will we see some of the levels forecast by so many?
This is possible. Let us take a look at a few things that could feed into this.
Trump Expands Bitcoin Support With No Tax Promise For Digital Transactions
Cryptocurrency, especially Bitcoin, inserted itself into this election cycle. Donald Trump has made a number of proposals including moving to have some of the strategic reserve for the United States represented in Bitcoin.
This is a reversal of the stance that his administration took, one that wasn't exactly friendly to crypto.
That said, he is now adding the "promise" of no taxes on digital transactions. Of course, we have to keep in mind that this is nothing more than a campaign promise, one that is not within the power of the President. Congress is the one who is in control of taxes.
Nevertheless, having the talking point out there is a positive. Perhaps Congress will go along with this idea if Trump does get into office.
Florida Considers Bitcoin Investment for State Pensions
Here we see another avenue of Bitcoin interest. Pension funds are huge. There is a move to get a certain portion of the holdings into Bitcoin.
The state of Florida is the latest to offer up this idea.
Florida’s Chief Financial Officer Jimmy Patronis is advocating for the state’s retirement funds to explore investments in Bitcoin, labeling the cryptocurrency as “digital gold.” This initiative, if passed, would place Florida alongside Wisconsin and Michigan as one of the few states integrating digital assets into state pension portfolios.
While this would not likely be direct into Bitcoin, the fact the state would invest in Bitcoin products, such as an ETF, shows how mainstream this is becoming.
The fact that this is coming from the state of Florida is important as it is the 4th most populated state along with the same in terms of its economy. In other words, it is larger than both MIchigan and Wisconsin.
We are seeing this working up the scale. Perhaps California, Texas, or New York might follow.
MicroStrategy’s $42B BTC plan
What is a Bitcoin discussion without Michael Saylor?
On the most recent earnings call, the CEO of Micostrategy offers up something very interesting. The total price tag of this idea is $42 billion.
“Today, we are announcing a strategic goal of raising $42 billion of capital over the next 3 years, comprised of $21 billion of equity and $21 billion of fixed income securities, which we refer to as our “21/21 Plan.”
Where will this money go? To buy Bitcoin of course.
Some are questioning whether Saylor is positioning Microstrategy as an alternative to the Bitcoin ETFs. Whatever the end result, $42 billion added to the $15 billion in Bitcoin the company already has will put it near $70 billion (based upon today's prices).
Of course, many expect the price of BTC to increase over the next 3 years meaning the company could see its present stake worth $30B-$40B.
Bitcoin Is Now Wall Street
Over the past year, we discussed how Bitcoin was being hijacked by Wall Street. I think that, at this point, it is no longer speculation.
Bitcoin is now property of Wall Street. It is a new toy for them, one they are using to create an assortment of products.
Consider this: Blackrock's Bitcoin ETF is just shy of $30 billion. This only went live back in January of this year. This is on top of the goals that Michael Saylor has and the appetite for BTC there.
What happens when pension funds, central banks, and other institutions wants some Bitcoin exposure? Whether that is done through Blackrock, Microstrategy, or by purchasing BTC directly, this is going to put it in the hands of major players.
Where does the individual stand in this? Quite frankly, picking up crumbs.
Now don't get me wrong. Anyone who is holding Bitcoin in their wallet will do very well. This same holds true if you were one who did purchase via an ETF. Any exposure to Bitcoin will likely serve each very well.
I never took exception to price projections made regarding Bitcoin. The reality is I have no idea what this will move to. However, the fact that major players were going to be moving in became obvious more than a year ago.
So what happens to Bitcoin?
From the ideology standpoint, nothing. It is not the pathway to freedom nor will it replace the US dollar. We are not going to see a successful medium of exchange. As a currency, it is not very good.
What is probable is an asset that carries a huge price that Wall Street will build upon. The value will see derivatives galore erected as firms get creative with their offerings.
This is what Wall Street does.
The mantra of never sell your Bitcoin might be a valid one. It does seem like Michael Saylor is looking for more Bitcoin for his company. The state of Florida is considering getting into the game.