Bitcoin Marketcap
$935B
Gold Marketcap
$10.87T
BTC Settlement Volume (24hr)
$19.05B
BTC Inflation Rate (next 1yr)
1.80%
CASEBITCOIN
making the case for bitcoin every day
Bitcoin Marketcap
$935B
Gold Marketcap
$10.87T
BTC Settlement Volume (24hr)
$19.05B
BTC Inflation Rate (next 1yr)
1.80%
CASEBITCOIN
making the case for bitcoin every day
Bitcoin is a scarce digital asset with an unchangeable monetary policy. Its rate of inflation is currently under 2% and decreasing, ultimately to zero. Only 21million BTC will ever exist, with ~18.6million in existence today. It is fundamentally independent of the fiat money system, yet is a liquid, globally tradeable asset. BTC is convertible to over 150 national currencies 24/7, and can be self-stored or custodied with 3rd parties, including with qualified custodians. Bitcoin can be traded on venues ranging from peer-to-peer services, to large regulated US institutional brokerages and exchanges.
Bitcoin vs Select Indexes & Assets
Marketcap
Price
Volume
24hr
Inflation
Next 1yr
Inflation
Next 10yrs
ROI
1yr
CAGR
10yr
Volatility
1yr
Sharpe
1yr
Sharpe
5yr
Bitcoin
$932B
$50,011
$20.44B
1.80%
10.34%
579.37%
177.48%
0.47
4.52
2.01
Gold
$10.87T
$1,788
~$4.54B
1.52%
15.18%
2.48%
1.67%
0.11
0.27
0.61
S&P 500
~$34.82T
$4,132
--
--
--
47.35%
11.82%
0.15
2.77
0.98
NASDAQ
~$19.22T
$13,832
--
--
--
61.17%
17.06%
0.19
2.71
1.23
USTs (TLT)
--
$140.34
--
--
--
-17.52%
4.18%
0.11
-1.69
0.11
https://casebitcoin.com
On Saturday night, the price of bitcoin (on Coinbase) dropped from over $60,000 at 8pm EDT to a brief low of $51,300 less than 3hrs later. Price has since recovered to ~$56,300 as of this Monday morning. So what happened?
Traders were using excessive leverage to go long. Funding rates for borrowing on Binance and other exchanges were in excess of 100% annualized. This is nothing new (rates were as high or higher near the Jan 8th $42k peak, as well as the February $58k peak), but it set the stage for a leverage cascade should something trigger even a moderate sell off. As it turns out, there were 3 triggers. All of them containing substantial degrees of misinformation, but with so many traders on margin, time to get at the truth was minimal.
Trigger #1: misinterpreted insider sales of Coinbase equity ($COIN).
There was a table circulating on twitter showing how much $COIN various C-level execs at Coinbase sold. The table misinterpreted how much equity each person actually owned, presumably by looking only at fully vested shares (ie, not accounting for additional options grants and unexecuted options), and therefore concluded that executives sold the majority of their shares, which people interpreted as bearish for the industry. Frank Chaparro at The Block cleared this up, finding that execs sold a far smaller portion of their shares:
Trigger #2: questionable 'news' about the Treasury Dept charging cryptocurrency businesses.
At 10:42pm on Saturday, a twitter account with a significant following tweeted: "U.S. TREASURY TO CHARGE SEVERAL FINANCIAL INSTITUTIONS FOR MONEY LAUNDERING USING CRYPTOCURRENCIES -SOURCES", with no further information available anywhere. Apparently some traders took this as reliable news; the majority of the downward price action took place minutes after this tweet. A couple hours later, Jake Chervinsky, General Counsel at Compound Finance, noted that this 'news' did not seem credible:
Trigger #3: Small-Sample Hashrate Data.
There have been power outages in Xinjiang Provence, China, the past few days, where a non-trivial portion of the bitcoin network's hashpower is located. Naturually, this caused a drop in hashrate, but measuring exactly how much is difficult due to the fact that bitcoin mining is a statistical process; thus hashrate data & charts are necessarily estimates. Data from CoinMetrics.io shows that these estimates fell from a high of 198 Exahash/s on April 15th, to 106 Exahash/s on Saturday (April 17th), a roughly 46% drop. But the estimate for yesterday (April 18th) has rebounded to 145 Exahash/s. It's reasonable to expect a significant change in hashrate due to the power outage (& we see significant variation when miners move equipment in China just due to seasonality), but it's unreasonable to assess these numbers on a 24hr basis due to the inherant statistical variance. Smoothed data over a week or so are far more representative. Nic Carter summed it up best:
Recent Headlines
Bitcoin reminds me of gold when I first got into the business in 1976
Frankly, if the gold bet works, the bitcoin bet will probably work better
Bitcoin is a technological tour de force
[people] use [bitcoin] more as an alternative to gold. It’s a speculative store of value.
There are 3 eras of currency: commodity based, politically based, and now, math based.
Bitcoin may be the TCP/IP of money.
If they become widely accepted, virtual currencies could have a substitution effect on central bank money.
Bitcoin is Gold 2.0, a huge, huge deal.
I think every major bank, every major investment bank, every major high net worth firm is going to eventually have some exposure to bitcoin or what’s like it
Bitcoin is money, everything else is credit.
Common Critique #8
Bitcoin Fails As a Currency
Critique: Bitcoin is too volatile to be a day-to-day currency, plus it takes too long for transactions to settle, and sometimes has high transaction fees, so it's a failure as money.
Rebuttal: It's true that bitcoin is not a viable global every-day currency today (though it settles $billions equivalent in transactions every day). And it may never be. But that's ok. Gold... more
“SkyBridge filed with the SEC to form a subsidiary named "SkyBridge Bitcoin Fund L.P."...” more
“...post-pandemic changes to the policy environment, debt levels and diversification options for investors mean the asset manger now has 'to admit [bitcoin] does' have a role in asset allocation, at least over the long term....” more
All you need to read to understand the investment case for bitcoin.
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