In our Friday articles, we take a deep dive into the current state of Bitcoin. We previously published a series debunking the FUD surrounding Bitcoin - you can find those links at the bottom of this article. Every Friday we will continue to publish brief State of the Coin newsletters to keep subscribers up to date on BTC with both on-chain analytics and off-chain news from the Bitcoin industry. For full disclosure, Brandon and Daniel are strong believers in Bitcoin and both have allocated portions of their portfolios to BTC (HODL baby).
Let’s take a look at the State of the Coin
A look off chain:
BlockFi files for a spot BTC ETF: BlockFi has filed a proposal for a spot BTC ETF - the BlockFi NB Bitcoin ETF. Several futures-based funds have already launched, including the ProShares Bitcoin Strategy ETF and the Valkyrie Bitcoin Strategy ETF, however the SEC has not yet approved a spot-based fund. BlockFi’s own future-based fund - BlockFi Bitcoin Strategy ETF - has yet to launch. Several others have filed for spot-based BTC ETFs, including VanEck, which is supposed to receive a ruling from the SEC on November 14th.
Latin American real estate leader to accept BTC: Latin American proptech company La Haus announced on Wednesday that they will begin accepting BTC from home purchases. The company is now accepting BTC payments for condominiums in a luxury development in Mexico, but plans to quickly expand this to their entire inventory, which includes more than 80,000 listings. La Haus has presences in Colombia and México, facilitates more than $1 billion in gross transactions per year, and reported more than one million monthly users.
Apple CEO Tim Cook holds crypto: On Tuesday, Apple CEO Tim Cook hinted that he holds BTC in his personal portfolio. When asked whether he held bitcoin or other cryptocurrencies, Cook replied: “I do. I think it’s reasonable to own it as part of a diversified portfolio.” Despite his personal optimism surrounding BTC and other cryptocurrencies, Cook added that Apple will not be investing in crypto anytime soon (although they seem to at least be looking into it). “I wouldn’t go invest in crypto, not because I wouldn’t invest my own money, but because I don’t think people buy Apple stock to get exposure to crypto,” Cook said.
Jeffries sells gold to buy BTC: Christopher Wood, global head of equity strategy at Jeffries increased exposure to BTC by 5 percentage points and decreased exposure to gold by the same amount, citing the growing mainstream acceptance of cryptocurrencies. In 2020 Jefferies Group, a diversified financial services company engaged in investment banking and capital markets, asset management, and direct investing, delivered record annual net revenues of $5.2 billion and record net earnings of $875 million. I hope Peter Schiff doesn’t see this.
Zimbabwe looked promising, but now dismisses BTC as legal tender: Rumors that Zimbabwe was on the verge of adopting BTC as legal tender seem to have come to a halt as their Minister of Information Monica Mutsvangwa clarified that they are not considering the adoption of cryptocurrencies or Bitcoin. The rumors began circulating after Charles Wekwete, permanent secretary of the president’s office, said that the government was in talks with private sector businesses to help introduce cryptocurrency in the country. Rather, the country seems to be further exploring the possibility of a central bank digital currency (CBDC).
Bitwise withdraws their BTC futures ETF: Bitwise Asset Management has withdrawn its proposal for a BTC futures ETF, citing cost and complexity. Bitwise CIO Matt Hougan tweeted “our analysis suggested contango (associated with a futures ETF) would cost investors 5%-10% per year, before compounding.” Although they’ve withdrawn their futures-based product, Bitwise still has a spot-based BTC ETF in the pipeline and will direct their attention toward developing that fund. Hougan added “Ultimately, what many investors want is a spot bitcoin ETF...Bitwise will continue to pursue that goal, and we will look for other ways to help investors get access to the incredible opportunities in crypto.”
We’re always looking for guest writers! If you or someone you know would like to be featured on State of the Coin as a contributor, let us know! You can email us at firstname.lastname@example.org or DM us on Twitter (@Greencandleit)!
A look on chain:
Let’s take a look at on-chain data from Glassnode!
Price update: This week saw yet another all time high, breaking $68k several times. We now remain relatively stable in the $64-66k range. This hopefully represents a nice layer of support in the mid-to-high 60s. As of this writing, in the last week, BTC’s USD price is up 6.8%; in the last month, it is up 16.6%; in the last year, BTC price is up 315.3%.
S2F Model Update: Price currently remains well below the stock-to-flow model. In fact, the model has price on November 11th at $107,270 USD, leaving us roughly $42k away from predicted price (note that we keep tracking closer to model predictions week after week). Although we remain below model predictions, the model tends to perform well immediately prior to halving events (see red circles below). The model has a predicted USD value of $121k in March of 2024, when the next halving event is expected to occur. Remember, BTC is a long term investment, not a “get rich quick” vehicle. To learn more about the S2F model, check out this article by PlanB.
SOPR: The Spent Output Profit Ratio (SOPR) is computed by dividing the realized value (in USD) by the value at creation (USD) of a spent output. Or more simply: price sold / price paid. Values greater than 1 indicate that coins are being sold for profit (typically bullish) and values less than 1 indicate coins are being sold at a loss (typically bearish). SOPR remains positive but relatively low (that is, it is not spiking in ways similar to previous low-to-mid 60k price points in August). This suggests that HODLers are doing what they do best, even as price remains in ATH range.
Inflation hedge performance: This week the U.S. Federal Reserve released October’s economic data, including their consumer price index (CPI) which is commonly used to measure inflation. In October, CPI grew 6.2% year-over-year, the largest 12-month change in over 30 years. To test whether BTC acts as a solid hedge against inflation, we correlated monthly average BTC value (in USD) with CPI since January 2020 (the last 22 months). We found a strong positive relationship between BTC value and CPI, indicating that BTC’s value rises as inflation worsens.
BTC Meme of the Week! What would the BTC community do without memes? Every week on State of the Coin, we feature our favorite meme of the previous week. If you create or see a meme that you like and want us to consider featuring it, tag us on Twitter or instagram (both @Greencandleit)! Here is one we came across from @BitcoinLiotta on Twitter. Be sure to give Bitcoin Liotta a follow for high quality memes!
New to Bitcoin and looking to learn more? Check out our introductory series, where we walk through common misconceptions about the world’s leading cryptocurrency!
Happy Friday everyone - get after it this weekend!
Brandon and Dan
Disclosure: The authors of this writing hold positions in cryptocurrency mentioned in this article. That cryptocurrency is Bitcoin. The article was written by Daniel Kuhman, Brandon Keys, and occasionally a guest writer; it expresses the author's own opinions. They are not receiving compensation for it. The information presented in this article is for informational purposes only and in no way should be construed as financial advice or recommendation to buy or sell any stock or cryptocurrency. None of the authors of this article are financial advisors. We encourage all readers to do further research and do your own due diligence before making any investments.