2024.01 - Wave

IMHO

The overall sentiment on Bitcoin Twitter could be classified as "insanely bullish" in a range between batshit insane and "jacked to the tits" levels.

It's been a brutal bear market and there are good reasons to be bullish, the most obvious one being the seemingly imminent ETF.

Rumors are, multiple instances of the much balihooed spot Bitcoin ETF may be approved as you're reading this with aims of launching later in the week.

A fake rumor of the ETFs being denied gave the market an excuse to dump, liquidating over $500m in leveraged long positions.

It's a fascinating moment to be in this space. As you may know, interest in Bitcoin comes in waves. A new wave is headed this way, but is not quite here yet (try to convince your no-coiner friends this is the best time to buy and see what happens)

Even the "Pros", who are willing to speculate in Bitcoin still don't get it (more on this below).

So, let's get the obvious out of the way, yes Bitcoin will probably zig-zag its way up in face-melting rallies, congratulations if you are already here and holding sats. May your family remember you as the First of Your Name.

The full impact of the ETFs on Bitcoin —beyond pumping our bags— remains to be seen. One large concern is that the ETFs will fractionally reserve Bitcoin (produce more paper Bitcoin than the real Bitcoin they hold). The rules are this is not allowed to happen, we'll see what really says.

Another big, valid concern is the concentration of custody —Coinbase will be custodian for the majority of ETFs. This is not healthy as it generates a massive honeypot for thieves and governments (did I just repeat myself?)

This should not be a huge concern for those of you holding your own keys.

Speaking of keys, Fred Krueger wrote a piece (then turned it into a clip) which is worth 2.5 minutes of your time:

His main point is ETFs are easier and more convenient than full custody, hence most people will opt for them.

He's definitely not wrong on most people choosing convenience without hesitation but since you are here, I think it's worth digging a little deeper into his arguments because —and this the most interesting part of this moment— you are about to witness society being re-programmed. The new wave of entrants to Bitcoin will not just decide to be curious about it (like you and I did) they will be actively pushed towards the asset by the wealthiest institutions on the planet.

Your friends, family and ex-girlfriends will switch from "Bitcoin Bad" to "Bitcoin Good", BUT they will not be thinking of Bitcoin, but rather Bitcoin™ (h/t to Ben Hunt)

Bitcoin™ is a hygienic, convenient, accessible (through sanctioned KYC'd brokerages of course) product that will eliminate the difficult and annoying bits of Bitcoin ownership and sit comfortably alongside the rest of your portfolio. Just a phone call or a fax away!

I'm not against the ETFs (and will be grateful for them pump they'll bring). I acknowledge most people will "get their Bitcoin toes wet" through an ETF because it WILL be a lot easier. This is not a bad first step, but it will likely grow into a bad habit.

"Why learn how to drive or own a car? Just use Uber"

Yes, Uber does bring many of the conveniences of car ownership and takes away the multiple pains of ownership, but it makes you dependent on a "trusted" 3rd party, which is not a huge deal until you find yourself trapped in an emergency because you don't have a car or know how to drive.

This next wave of Bitcoiners will probably be huge, but they will be buying a product with the sovereignty abstracted out of it.

Enjoy the pump, but don't forget why you're here. Stay sovereign.

Bitcoin News

Fifteen

Bitcoin's Genesis Block —the initial block that launched Bitcoin into existence— turned 15 years old on Jan 3rd.

Speaking of Satoshi, not sure why, but someone sent him a little tip last week:

On Your Marks

Prepare for an onslaught of competitions as the ETFs prepare to launch.

One that's already started is for Bitcoin-positive ads, these launch campaigns are going to be the Super-Bowl equivalent for regular ads, should be fun.

Another race that already started is the race for low fees. It was kicked off by Fidelity, then BlackRock and Ark underbid them.

The race to appeal to bitcoiner sensibilities has also started…

Enjoy the launch when it comes, it should be memorable.

What They Do

JPMorgan's Jamie Dimon trash-talks Bitcoin every chance he gets. Doesn't mean he's not going to get his dirty little hands on it. It says something about an asset when even its most outspoken critics get in line to buy some.

Aqua

A new wallet was released by Jan 3 —the team working to orange-pill nation states, I will be paying with is this week and will report back.

Gaddamit

Inverse Cramer strikes again. Just after Cramer says something good about Bitcoin price tanked, it's rather impressive really (price has now recovered).

Satoshi

Hal Finney was the quintessential Bitcoin pioneer (and the recipient of the first-ever Bitcoin transaction). So much so, that many have speculated he may have been the real Satoshi Nakamoto.

In this interview, Hal's wife Fran opens up about how negative this speculation was for Hal near the end of his life.

Electrifying

The fact Bitcoin mining makes it easier to kick-start electrification projects is not priced in.

Halal

Bitcoin has been declared acceptable under Islam (I believe trading is still considered haram)

Blockheads

Ever since ordinals appeared, there's been a battle for Bitcoin's blockspace —which is a scarce good. One mining pool, Ocean, has brought these concerns to the fore by pointing out how centralized the formation of new blocks is and offering its members three alternative block templates to subscribe to, two of them weeding out most non-standard transactions.

The discussions have been informative and are yet to be resolved, but it does seem clear that much of the recent congestion (and high transaction fees) have been caused by the minting / trading of shitcoins (BRC tokens) on top of Bitcoin.

"Crypto" News

"Crypto" is Kryptonite for savings

Centralized-er

Vitalik dropped Ethereum's RoadMap again, and it does not disappoint. "The Merge", The Surge", "The Scourge", "The Verge", "The Purge" and "The Splurge" remain actual names of Ethereum's development stages.

His comments are filled with awe-inspiring gems such as this:

VDFs have been shrunk to reflect a temporary reduced emphasis, due to cryptographic weaknesses in existing constructions —Vitalik

The incomprehensible language should inspire you to place your complete trust on the Wise Leader Who Has Everything Figured Out™

The roadmap update came on the tail of a proposal to raise the minimum stakes for validators (pretend-miners) to a cool $1 Million, because f*ck the brokie plebs amirite?

Best I Can Do

FTX is proposing a 61% haircut to its ex-customers for being trusting rubes.

Fiat News

Birthdays

Bitcoin is not the only currency that had a birthday. The Euro —which over its lifetime has lost 91% of its value vs gold— turned 25 one week ago. Wonder how much longer before its replaced by a CBDC?

ATH

The US National Debt is on an absolute tear. Not only at an All-Time-High but accelerating rapidly (55% increase in the last 5 years).

Hot Wheels

Forget Beetcoin guys, new cars now have Number-Go-Up technology

Dystopian News

Dindoo Nuffin

The US Government has decided to not investigate itself for corruption. What's $100 Million betwen friends?

Whoosh

Picture this, you're enjoying your "complimentary" bag of salted peanuts when a random piece of airplane wall decides to quit 16,000 feet in the air. Alaska Airlines Boeing 737-Max 9 passengers just got to experience that, thankfully no one was killed.

The trains in Atlas Shrugged are making more and more sense each day.

Price News

Head Fake

The most recent dip was a timely reminder of why you don't trade Bitcoin —and especially not with leverage. Over $500 million wiped out.

Bitcoin Surfing

Bitcoin came back to touch the Board ($42k) last week, plenty of headspace above.

Dip Fishing

After shaking out $500 Million in leveraged longs, Bitcoin continued to range close to the $44k level

Calm Chart

December closed in the Green (as did 2023) and January is opening Green as well.

Zen Chart

Each candle in this chart represents a full year. The yearly return is below each candle.