₿ Will Sovereign Wealth Funds Join The Bitcoin Bandwagon?

What’s on the Menu 🍴

There’s a race towards the end of the year…

And governments, funds, and other institutional investors are taking notice!

Today we’re looking at ways investors can capitalize on changing market dynamics.

Let’s dig in:

• Will Sovereign Wealth Funds Join Bitcoin Bandwagon? ₿

• Will HOOD Pull A COIN? 🏹

• Chart of the Day - BTC/NQ 📈

• 3 Easy & Low Cost Asset Protection Strategies 📺

Today’s newsletter is a 4 minute read.

Will Sovereign Wealth Funds
Join Bitcoin Bandwagon? ₿

As bitcoin’s price climbs higher, rumors are beginning to spread of more institutional-level buying…

Like Qatar's Sovereign Wealth Fund potentially looking to buy $500 billion in Bitcoin.

These reports are unverified and possibly inflated…

But they fuel discussions about the future dynamics of Bitcoin if sovereign funds, governments, and other large institutions start to enter the fray in a big way.

We think governments are putting the spotlight on bitcoin again, since the 2 big news pieces this week are:

1. El Salvador’s bitcoin position is finally profitable

2. Microstrategy’s bitcoin position is up $2B in profits

Potential Implications of Large-Scale Institutional Investments in Bitcoin

Scarce Supply and Price Surges: Bitcoin's current market cap is approximately $850 billion.

And there’s less than $100 billion worth of bitcoins available on exchanges.

This highlights a scenario of limited supply against potentially high demand.

If governments and large funds start investing heavily in Bitcoin, this scarcity could drive prices up dramatically, especially given Bitcoin's immutable supply limit of 21 million coins.

FOMO Among Asset Managers: The entry of sovereign wealth funds and other large institutions could trigger a Fear Of Missing Out (FOMO) among other asset managers.

As they rush to invest in Bitcoin to not lag in the burgeoning digital asset space, this could create a self-fulfilling cycle where the anticipation of higher prices fuels actual increases in value.

Impact on Bitcoin’s Market Position: Currently, as the 9th most valuable asset, large-scale investments could propel it further up the ladder, making it a more mainstream and acknowledged component of global finance.

Influence of Regulatory and Policy Decisions: The involvement of governments and sovereign funds in Bitcoin could bring more attention to the need for regulatory frameworks. It could lead to more structured and perhaps favorable policies, given the vested interests of these large players.

Decoupling from Traditional Market Trends: Bitcoin’s previous price bubbles have primarily been driven by retail investors…

But large-scale institutional buying could decouple Bitcoin’s price movements from these traditional market influences, introducing a new dynamic to cryptocurrency pricing.

Impact of the Bitcoin Halving Event: The upcoming Bitcoin halving in April 2024, which will reduce the block reward thus slowing down new Bitcoin production, could coincide with increased institutional interest.

Market Stability and Maturity: Institutional investments, given their scale and long-term nature, could bring greater stability to the Bitcoin market, helping it mature and possibly reducing its notorious volatility.

Geopolitical Shifts: If countries invest heavily in Bitcoin, it could signal a shift in geopolitical financial strategies, with nations leveraging cryptocurrencies as a tool for economic and diplomatic influence.

Our Take

Prices of assets go up and down because of the irrational emotions of people…

And the introduction of large institutional buyers can create price moves that dwarf those seen in the early days of bitcoin.

So while there’s no guarantees bitcoin’s going to $1M per coin, we think bullish market sentiment is finally aligning with the reality of bitcoin’s global adoption.

Will HOOD Pull A COIN? 🏹

As many investors are aware: Bitcoin has been on a tear sporting higher prices.

Many publicly traded stocks that have exposure to Cryptocurrencies like Bitcoin have also been rallying.

Crypto miners like RIOT, MARA and CLSK have been rising along with Bitcoin prices.

Coinbase, which is a top, publicly traded Cryptocurrency exchange, has also seen some investor love from the Bitcoin move:

But there is one stock that actually does have some exposure to Crypto-land that hasn’t really moved in tandem with as much enthusiasm: HOOD (Robinhood).

HOOD does offer Crypto trading just as COIN does. They also benefit from people simply increasing their trading activity in general (which has been happening as many stocks bounce off of lows).

HOOD is starting to show signs of catching up with its peers, and could end up being a short-term trading opportunity if it truly is just lagging behind a bit.

Of course the thing to watch out for with this idea is Bitcoin has had quite the run (stocks have as well), and this could lead to a VOLATILE pullback any day.

So, going into trading any of these names, you have to be aware of the risk of the momentum shifting abruptly.

Chart of the Day - BTC/NQ 📈

Today's chart shows an intriguing comparison that might be flying under the radar for many investors: Bitcoin's performance relative to the Nasdaq Composite Index (BTC/NQ).

Recently, Bitcoin has shown a significant breakout from a multi-year consolidation phase when pitted against the stock index.

This pattern suggests a shift in momentum, where Bitcoin is gaining strength in comparison to traditional tech-heavy equity assets represented by the Nasdaq.

The chart displays Bitcoin carving out a bottom over several years, indicating accumulation, and is now breaking out of this range, signaling a possible change in investor sentiment and market dynamics.

This chart highlights:

• The importance of understanding relative performance across different asset classes

• The potential of Bitcoin as a diversification tool that may not be fully correlated with the stock market, providing a hedge against sector-specific downturns.

3 Easy & Low Cost Asset
Protection Strategies 📺

We believe EVERYONE should be working to protect their assets…

And you don't have to be a multi-millionaire to need a strategy.

In today's video, Nikki uncovers 3 very simple and LOW-COST ways to implement iron-clad asset protection into your money plan!

Delicious Bites 😋

• Would you take the vacation or invest the money?

• CNBC: After the halving, Bitcoin will be the first asset more scarce than gold

• Why residential conversions can’t save commercial real estate

• These are the Americans that got a lot richer during the pandemic

• Return to office is “dead”

Food For Thought 🧠

“Investing should be more like watching paint dry or watching grass grow.
If you want excitement, take $800 and go to Las Vegas.”
- Paul Samuelson

DISCLAIMER: We are not investment advisors, and this content is for educational purposes only. We don’t offer financial, legal, or tax advice. Nothing we say is a recommendation to buy or sell any assets. Trading and investing are extremely risky, so please be careful and do your own research.