Happy New Year friends. Strap in for a wild ride in 2021 because the table is set for Bitcoin to have a wildly bullish year.
- In my last post I commented about how incredibly bullish it was that MassMutual was breaking the ice for the entire insurance and pension industries by dipping its toes in with a $100M bitcoin purchase. Now JPMorgan is echoing my thoughts with a report stating a a mere 1% allocation to BTC by pension funds and insurance companies from only the US, Eurozone, and Japan would amount to a $600B inflow. Bitcoin’s market cap at $28,000 is only about $500B. There is only about 2.4M bitcoins available for purchase on exchanges, and that number is declining as large, smart money players are rapidly accumulating and withdrawaling bitcoin from exchanges. That would be $600B chasing 2.2M bitcoins. $600B / 2.2M bitcoin = ~$272,000 / bitcoin. Obviously, this is a ridiculously oversimplified calculation, but it’s meant to begin to give you an idea of how mindbogglingly high BTC will go when all of the assets under management and retail investors in the world realize BTC is a must own asset.
- Standard Chartered and Northern Trust partner to launch Zodia, a cryptocurrency custodian for institutional investors. Norther Trust has $13T under management. Yup, the table is set for all the money in the world to flow into bitcoin.
https://www.northerntrust.com/united-states/pr/2020/standard-chartered-northern-trust-launch-zodia
- One River Digital Asset Management, a hedge fund partnered with Brevan Howard Asset Management, has bought $600M of BTC, and intends to allocate $1B total. A trickle, then a flood.
“There is going to be a generational allocation to this new asset class,” Peters said. “The flows have only just begun.” I couldn’t agree more.
- Finally, the most bullish piece in this post. Investment bank Jefferies is reducing exposure to gold in favor of BTC in one of its funds. Most people don’t realize this, but Bitcoin is going to suck the premium out of all assets that have been acting as a store of value due to monetary debasement over the past 40 years: gold, real estate, fine art, whisky/wine, tech stocks, etc. This excellent post begins to explain this idea. Think about underwhelming modern art selling at absurd valuations. Think of all the vacant luxury condos in NY and Vancouver owned by rich foreigners. All this value will flow into bitcoin as it is a more liquid, superior store of value.
Get ready. Be a modern day Noah. The trickle has just begun. Get on board the Bitcoin ark before the flood arrives.