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Elon Musk’s tweet leaves Bitcoin crumbling below $50K

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Bitcoin has registered more than five-fold gains. However, the asset managed to go on bombshell crash the immediate aftermath of the Tesla Chief’s latest tweet. Elon Musk revealed that his electric-car firm will no longer accept Bitcoin as a form of payment citing environmental concerns.

Taking to Twitter, Musk said that the car-maker was concerned about the “rapid use of fossil fuels” for the purpose of mining Bitcoin and transactions. The exec’s tweet also read,

“Energy usage trend over past few months is insane”

He went on to confirm that Tesla will not be selling its BTC holdings as it plans to use them for transactions as soon as the network transitions to more sustainable energy for mining.

However, this was enough for yet another high-profile dumping episode by the investors which Bitcoin to spiral down $45,000-level.

There are many players in the crypto community who were not impressed by this move. Binance CEO, CZ took a dig and said

“Elon probably did not research how much energy is required to run other [non-crypto] currencies that Tesla accepts.”

The author of the book ‘The Bitcoin Standard’ and Assistant Professor of Economics at the Lebanese American University, Saifedean Ammous was quick to point out about his aerospace manufacturer and space transportation services company SpaceX’s rockets. His tweet read,

“Unless you’ve also switched your rockets and battery manufacturing to “more sustainable energy” you’re going to look like a clueless big hypocrite here. The world needs sound money far more than it needs your rockets & government-subsidized electric cars.”

Bitcoin Manipulation Debates

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Elon Musk's tweet leaves Bitcoin crumbling below $50K 2

The recent chain of events right from the tweet prompted debates and speculations on how Bitcoin has been impacted by the billionaire’s tweet. Not to forget the Dogecoin [DOGE] drama surrounding his infamous memes and subsequent appearance on SNL. For novice crypto investors, the ferocious crash is a reminder that the cryptocurrency’s steady consolidation can turn south in a jiffy, and much of the market still remains opaque.

VanEcK had previously debunked the energy consumption theory and reported that 76% of Bitcoin miners utilize renewable energy sources. 39% of total miner energy consumption comes from renewable sources of energy.

In any case, Musk, being one of the world’s biggest advocates of BTC and a billionaire who serves as a founder of two massive tech companies to ever exist in the world, interestingly did not know about coin’s mining’s impact on the environment before announcing Tesla’s investment of $1.5 billion in it. Hence, it is natural that there is also widespread doubt over his intentions.

Bitcoin ETF To Take More Than Year To Make A Debut In The US

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The entire crypto market saw significant growth in terms of both price as well as market cap. Despite this surge, Bitcoin ETFs still seem to be struggling to garner approval from the United States’ prominent financial watchdog, the Securities and Exchange Commission [SEC].

Bitcoin exchange-traded funds [ETF] have seen the light of the day in various countries across the globe. However, due to the stringent laws in the United States of America ETFs are still struggling to receive approval. While crypto lovers across the globe assumed that the SEC would give Bitcoin ETF a thumbs up considering the drastic growth of the coin, a prominent analyst pointed out that this could take more than a year.

Bitcoin ETF Could Take Up To Two Years

Appearing in a recent interview with CNBC, CFRA Research’s prominent analyst, Todd Rosenbluth suggested that the SEC would be taking some more time to approve Bitcoin ETFs. While prominent platforms like  VanEck, Fidelity Investments, and Valkyrie Digital Assets have laid out their proposals for the roll-out of a crypto ETF, CRFA’s head of ETF and mutual fund research asserted that these platforms would have to wait for quite a while.

He stated,

 “We’ve got a number of firms that have either gone through the filing process or have previously filed but are waiting for more clarity. The SEC is less likely we think to try to pick a winner, as to who comes first and I think we’re more likely to see them — if they do approve an ETF — to approve multiple Bitcoin-related ETFs.”

The United States of America has time and again revealed that it has been very strict with regard to laws pertaining to the crypto industry. While several countries like Canada have already given a green signal to Bitcoin ETFs, the US seems to be lagging behind. Rosenbluth added,

“We’ve got a number of firms that have entered. We think we’re likely to see one in the coming year or two, but we don’t have a firm timeframe as to when the answer would be yes.”

Goldman Sachs To Offer Notes Linked To ETF That May Give Exposure To Bitcoin

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Goldman Sachs, the American multinational investment bank and financial services company has filed with the US Securities Exchange And Commission [SEC] to offer an investment product that could give exposure to its clients to cryptocurrency such as Bitcoin.

This new investment product is tied to the performance of the ARK Innovation ETF, which is capable of investing in Bitcoin and products and services inside the crypto-asset’s boundary. While Goldman Sachs filing is not for a Bitcoin ETF, however, the product that would track an ETF exposed to the share of the cryptocurrency indirectly via an investment in a grantor trust.

The filing by Goldman Sachs stated,

“The ETF is an actively-managed exchange-traded fund that will invest under normal circumstances primarily (at least 65% of its assets) in domestic and foreign equity securities of companies that are relevant to the ETF’s investment theme of disruptive innovation. The ETF investment advisor defines “disruptive innovation” as the introduction of a technologically enabled new product or service that potentially changes the way the world works.”

Goldman Sachs And Its Change Of Heart For Bitcoin

The news comes a couple of weeks after the international banking giant’s COO John Waldron had revealed exploring Bitcoin ETF and custodial services with the US regulator due to the growing demand for the underlying cryptocurrency. In addition, the bank had also recently rolled-out its cryptocurrency trading desk again in a bid to support futures trading for BTC.

It is important to note that Goldman Sachs is among the country’s banking organizations that have not been a fan of Bitcoin for the longest time. Just last year, the multinational bank had called that Bitcoin is “not an asset class”. However, the change of winds could essentially strengthen Bitcoin’s position in the traditional finance world.

Currently, there are seven Bitcoin ETF applications in the US apart from Goldman Sachs. They are – Fidelity, SkyBridge, Morgan Stanley/NYDIG, VanEck, Valkyrie, WisdomTree, and Bitwise. This essentially meant that Bitcoin is just a green light away from huge capital inflows.

Fidelity Subsidiary Plans To Launch Bitcoin ETF

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Bitcoin ETFs have become increasingly popular as Bitcoin continued to flirt with its ATH. Fidelity Investments becomes the latest entrant in the join the race and is now prepping up the roll-out of its own Bitcoin ETF. According to the official document, the investment giant’s affiliate, FD Funds Management, has filed with the US Securities and Exchange Commission [SEC] to seek approval for the “Wise Origin Bitcoin Trust,”

The preliminary filing revealed that “Wise Origin Bitcoin Trust” would hold the crypto-asset and value its shares on the basis of its prices from major cryptocurrency exchanges, such as Coinbase and Bitstamp.

Fidelity’s statement to Reuters read,

“The digital assets ecosystem has grown significantly in recent years, creating an even more robust marketplace for investors and accelerating demand among institutions. An increasingly wide range of investors seeking access to bitcoin has underscored the need for a more diversified set of products offering exposure to digital asset”

Fidelity-backed trust does not plan to sell the crypto-asset, but will rather use it to settle certain expenses, which under current guidance of the IRS will be deemed as a sale of such virtual currency.

Bitcoin ETF Gains Traction

The US SEC has rejected all the Bitcoin ETF proposals in the past. It had acknowledged a proposal from VanEck last week. In addition, there are four applications in total that are pending review by the authority which included- NYDIG Asset Management, WisdomTree Investments, Valkyrie Digital Assets, and VanEck Associates Corp.

Unlike its US counterpart, Canada’s regulatory authority has been quite progressive. In Feb-March, three Bitcoin ETFs went live back-to-back on the Toronto Stock Exchange after receiving the stamp of Bitcoin ETF.

Just last week Brazil became the first country in the Latin American region to approve the exchange-traded fund. This was launched by asset manager QR Capital and is slated to go live by June this year.

Bitcoin Stumbles Along Its Way as Gold Reigns Supreme

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The cryptocurrency market has taken a hit the past weekend after most digital assets have lost their value. The decline was followed by a fall in stock prices as well as oil prices, with ‘ liquid gold ‘ falling to one of its lowest points since 1991.

Bitcoin, which was usually considered a safe haven for investors has also crashed alongside its mainstream compatriots. While the world’s largest cryptocurrency, stocks, and oil have fallen, gold has increased in value to become the only stable asset.

What surprised investors the most was the fact that Bitcoin acted the same way as traditional assets. Bitcoin usually behaved conversely to that of the S&P 500 and the NASDAQ, prompting many to believe that the cryptocurrency would always remain a stable source of value. This was proved wrong when over the last weekend, Bitcoin fell below the $8000 mark while the S&P 500 fell by 4 percent while oil fell by more than 20 percent.

Bitcoin had fallen more than 8 percent over the weekend and had broken the immediate support to trade in the $7000-$8000 range. At the time of writing, Bitcoin was trading for $7,910.82  with a total market cap of $144.47 billion. The world’s largest cryptocurrency had fallen more than 12 percent over the past seven days and that had brought the weekly value drop to 12.07 percent.

Generally, Bitcoin was compared with all the traditional stocks but some analysts expected altcoins such as Ethereum and XRP to also prosper. Alas, the largest altcoin in the market could only manage the value of $199.78 while the market cap just broke the $21 billion mark. Ethereum’s weekly drop was recorded to be 10.44 percent while the market volume broke the $25 billion mark.

The price of gold nearly crossed the $1700 market on Monday before correcting itself to lower values. This was the first time in a long time that gold was faring better than its compatriots who were down by the trenches. The VanEck Vectors Gold Miners ETF fell by 14.5 percent over the last week. This was worse than the 11.5 percent drop within the S&P 500 market. Companies such as Newmont [NEM], Franco-Nevada [FNV[ and Barrick Gold [GOLD] all tanked over the course of the past seven days.

Although gold was faring better than most of the other assets, it still did not mean that the economy was not collapsing. Gold fails to become a safe haven when the economic and financial rates were crumbling faster than the interest rates were falling. Investors were still waiting to see if the return on gold would be as massive as it is expected to be with Bitcoin and other major cryptocurrencies.

Along with traditional stocks, American citizens also kept an eye on Treasury’s These decade-oldBitci treasury futures were up by more than 1.3 percent during the week which was a sharp drop compared to Friday’s 0.76 percent. A majority of the people were worried about the drop in oil prices, a radical impact of the Coronavirus. International agencies even predict a contraction for the first time since 2009. Mikhail Leontiev, a spokesperson for Russian state oil company Rosneft stated:

“By yielding our own markets, we remove cheap Arab and Russian oil to clear a place for expensive US shale oil and ensure the effectiveness of its production.”

Countries were waiting and watching for the impact that the prices will have in the future. At the moment, it looks like a reprieve will only be brought about by curbing the spread of Coronavirus.

SEC Emerges As Villain Again As another Bitcoin ETF Gets Rejected

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Bitcoin ETF”s has been making rounds for the past couple of years, but since its inception, the entity has faced the wrath of both the government and the regulators. In the most recent series of events, the US Securities and Exchange Commission[ SEC] dismissed another proposed ETF.

The regulators shot down the ETF proposed by Wilshere Phoenix, who thought he was going to do away with the ‘ ETF rejection trend. ‘

Phoenix had applied for Equity Trading Fund [ETF] in May 2019 with the New York Stock Exchange [NYSE] Arca. The SEC rejected the ETF by stating there was no proof that Bitcoin could sustain without market manipulation. The issue of manipulation was brought up again because of the incessant dips in prices that occurred recently.

According to the official SEC release:

“The Commission concludes that NYSE Arca has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of Exchange Act Section 6(b)(5), and, in particular, the requirement that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices’ and ‘to protect investors and the public interest”

Over the last two years, the SEC has rejected multiple ETFs, one of the most popular being the VanEck ETF. The ETF was tabled multiple times by the regulator for reasons such as ‘cloudy regulations’ and ‘manipulative markets’. Phoenix’s proposed ETF wanted to mix Bitcoin and short-term treasures, according to the SEC release.

The decision to reject the ETF has not boded well with some people and Hester Peirce was definitely one of the enraged members. Peirce, who is the Commissioner of the SEC wrote a scathing dissent where she pointed out that the SEC had a ‘heightened standard’ only for Bitcoin.

Peirce opined that the multiple rejections only meant the SEC had no plans to list products such as Bitcoin and other cryptocurrencies anytime soon. She also clapped back at the ever-shifting standards that the SEC sets just for digital assets. The Commission has been a vocal supporter of Bitcoin ETF and has even made positive comments about the industry earlier.

The proposed fund had plans to change the way people trade Bitcoin and how the cryptocurrency would respond to changes in its price. Wilshere Phoenix had claimed that his Bitcoin ETF would automatically rebalance itself in response to Bitcoin’s price volatility. To balance a change, the now rejected fund would put more capital into bonds and vice versa.

Canadian firm partnered with Van Eck and Gemini confirm that they have received green signal for ‘The Bitcoin Fund’

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Canada has slowly but surely been making splashes in the cryptocurrency world, and the latest decision put forth by the Ontario Securities Commission Panel has only made the impact even clearer.

Yesterday, on October 30, 3iQ Corp, a Canadian investment fund manager focused on the digital asset space, and disruptive technologies revealed that they had received the green signal for The Bitcoin Fund. 3iQ is one of several companies from Canada that have made big names for themselves in the fintech industry.

Post the announcement, Fred Pye, the President, and CEO of 3iQ, said:

“Over the past three years, we have worked actively with the OSC’s Investment Funds and Structured Products Branch to create an investment fund that we hope will allow retail investors the benefits of investing in bitcoin through a regulated, listed fund.”

Fred Pye added,

“We have addressed the questions of pricing, custody, audit, and public interest issues in a regulated investment fund. We intend to refile the prospectus as soon as possible as the next step in bringing this ground breaking fund to investors.”

The company has plans to offer retail investors the exposure to Bitcoin and the decentralized asset class combined with registered and traditional investment accounts. It was also known that 3iQ had friends in high places, with VanEck industries being one of them. Jan van Eck, the CEO of VanEk, had stated:

“We were pleased to work closely with 3iQ in both the development of the index and in working with the regulators to address their concerns. We are obviously impressed with the determination and persistence of our Canadian partners.”

The partner list for 3iQ was impressive as Gemini also joined Van Eck, the Winklevoss brothers founded cryptocurrency organization. Gemini will be tasked to act as the digital asset custody solution for 3iQ. Cameron Winklevoss, the President of Gemini, claimed:

“As a New York Trust company we are required to store digital assets in a trusted, safe and compliant manner and will employ those principles to help 3iQ manage this innovative fund.”

Disclaimer: The presented information is subjected to market conditions and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

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A new application for a crypto-based ETF is in SEC’s hands (again)

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Having the U.S. Securities Exchange Commission (SEC) approve a cryptocurrency-based exchange traded fund (ETF) has become something of a holy grail for many crypto analysts over the last few years. Many believe that having SEC’s approval would finally give the crypto verse a seal of respectability and credibility from a regulatory agency that it’s lacked so far. It would also ease the way in for institutional investors.

Consequently, many applications have been sent to SEC so far and they’ve all been denied.

SEC’s resistance on the matter hasn’t dissuaded analysts and businesses of the value that an ETF would have for the cryptosphere as a whole and, more particularly, to the company that manages to pull the trick off first, which is why there are new projects and new applications to approve them.

The latest one was filed on May 9th, just a few days ago. So it’s now in possession of SEC. The new prospective ETF is sponsored by the United States Commodity Funds LLC (USCF).

The application’s creator is Crescent Crypto Index Services LLC, and it holds the ticket “XBET.” The company is a subsidiary of Crescent Crypto Asset Management LLC, and it’s a data collection firm that keeps the record of the market performance of Bitcoin and Ether according to market capitalization-weight.

The proposal

The application declares XBET to be an exchange-traded fund (ETF). That means that any investor interested in buying or selling shares in XBET will trade using their broker of choice. And that, in turn, means there will be commissions and charges, which is how brokers make their living.

XBET shares will trade on the NYSE Arca as “XBET.” In fact, they will be traded in the same way in which investors bid or ask for any standard publicly traded security.

USCF is a commodity pool operator. It’s under the Commodity Futures Trading Commission authority as well as the National Futures Association under the Commodity Exchange Act.

There’s competition, of course

So now XBET is on the list of ETF proposals under review by the SEC.

Two other Bitcoin ETFs are waiting for SEC to make a decision. One was filed by Bitwise Asset Management with NYSE Arca. The other one came from vanEck, SolidX and Cboe BZX Exchange. An announcement regarding those two was expected for last March, but it was postponed.

Which will be the first lucky project to become the U.S.’ first digital assets ETF? We don’t know, of course. So far, neither does the SEC. But sooner or later a project will come that will meet SEC’s regulatory requirements, and there’s no reason to believe that one of those three propositions currently under review couldn’t be it. At least non that we know.

It will be a game of patience for all those involved. SEC has been dragging its feet on crypto-related matters in such a way that, while many believed that it would hamper the cryptosphere’s development by trying to interfere too much, the opposite has been exact. It’s been keeping the cryptocurrency market from reaching its true potential by doing nothing and failing to make the appropriate (and often needed) regulatory decisions on time.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Ric Edelman: A Bitcoin ETF is on the way

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Creating a Bitcoin ETF has been a priority for many influential crypto players for months already (maybe more). But the road to an ETF has been almost as hard as Frodo’s road to Mordor.

Ric Edelman’s opinion

But Ric Edelman, founder of Edelman Financial Engines, appeared earlier today at CNBC’s ETF Edge at the Inside ETFs Conference in Hollywood, Florida. He had this to say on the subject:

“It’s virtually certain. The only question is when” then he continued: “The SEC has several legitimate thoughtful concerns that the industry has to overcome but I’m confident they will. Eventually, we will see a bitcoin ETF and it’s at that stage that I will be much more comfortable recommending that ordinary investors participate.”

The Securities and Exchange Commission (SEC) has been walking with led shoes on the subject of cryptocurrencies. Are some of them securities? Are some of them actual money? And how can you tell the difference? Should these assets be available for the market at large?

And how should they be regulated? SEC has provided us with some answers to those questions, but some questions still remain, and they are getting on the way of mainstream adoption.

SEC’s decisions will be important because Bitcoin still lacks a secure chain of custody (in traditional terms, in practical terms, Bitcoin’s blockchain is most likely much safer than the traditional mechanisms).

On the other hand, SEC’s decisions will apply to the US only, which is not that important in crypto compared with Japan, China or Korea, so it will have no way of affecting international price flows or to governate trading platforms based overseas.

The big boys are interested

Mr. Edelman also explained that major financial institutions are interested in finding a solution that enables them to get a piece of the crypto action, and that could be enough for an ETF to go online eventually. The market is already there.

“We’ve got some serious players. Fidelity has made a major announcement in the custody issue. We’ve got Kingdom Trust and a number of other very serious players on the custody side. I’m confident that in very short order VanEck or Bitwise will satisfy the custody concern to the SEC,” according to Mr. Edelman.

Tom Lyndon has an opinion too

Tom Lydon, who is ETFTrends.com editor-in-chief joined the conversation to add that he already sees a huge demand for something like a Bitcoin ETF.

“There is pent-up demand. We interview advisors all the time. Seventy-four percent say they’ve talked to clients about their interests in bitcoin, so they need to step up when this happens because that money is going to go elsewhere,” Lydon contributed.

VanEck and SolidX are trying to get an SEC authorization to come up with the world’s first Bitcoin ETF. But they withdrew their application because Trump’s government shutdown could complicate things too much to get a resolution in time.

And why does any of that matters to you or me? Because many experts agree on something: the next bull run in crypto will be driven, at least partially, by institutional investors. So far, crypto’s players are small investors for the most part, and an ETF would be one of the ingredients that could change the market for good.

Image courtesy of Pixabay.

Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.

Bitcoin Part 2: The Future Of The First World

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The Course of Empire- Painting 4, Destruction by Thomas Cole, 1836

Buying bitcoin in the first world is like buying a boat ticket in Pompeii when Vesuvius started smoking.

In Part 1, the focus was on the value Bitcoin brings to the billions of the unbanked, which are oppressed in the third world.

In the not so distant future, Bitcoin will also be a critical store of value for people in first world economies.

The first world has different economic problems compared to the third world, but the pitfalls can be just as deadly to a person’s wealth.

Bitcoin provides a way for people to sidestep these pitfalls, when Rudyard Kipling’s, Gods of the Copybook Headings return once again to humble first world economies.

The new Federal Reserve Chairman, Mr. Powell, says that is our future.

In the first 1:37 minutes of this video, he calmly states:

“We’ve been on an unsustainable fiscal path for a long time.”

Think about what that means.

The US has half the world’s capital in their markets, US$30 trillion out of the US$60 trillion in all world markets, is the sole world superpower, and is the world reserve currency.

Why is Chairman Powell so calm when he says: “yes, the road we’re on leads only to destruction”?

Because as the US goes, so follow all the first world economies.

That is the not so distant future that awaits us all.

Strategies for the future should be multi-faceted, to allow pivoting and adaptation, so the opportunities presented as the future unfolds, can be exploited to always be more wealthy than the year prior.

This is whar collecting the tax on human behavior means.

Most people in the first world are unaccustomed to the daily hard realities which third world countries are intimately familiar like weekly food inflation, bank and social services closures, and fuel shortages.

When they encounter this reality for the first time in the future, most will not become reflective on why their beliefs did not match the real world around them, adapt to reality, and win.

Instead, they will most likely strike out in anger and fear because something they believed to be theirs, is being taken away.

It is just basic human nature which will continue to fuel politicians. Politicians will tell whoever votes for them whatever they want to hear.

In the future, a combination of chaining younger generations deeper in debt through increased deficitary spending, together with keeping unsustainable peograms from the past 50+ years while raising taxes, will cause businesses and people to leave the country.

This is a story as old as Rome, and thanks to human nature being the one constant in the ecuation, it makes it a cycle that is boringly predictable in our society.

In this not so distant future, Bitcoin will be a hedge against this cycle which leads to increased inflation of reserve currency, suppressed to zero interest rates, and eventually the confiscation of assets by governments which will follow when the first two no longer work.

When we reach the end of this unsustainable path, having Bitcoin in a cold wallet, which a person can carry in their pocket is going to feel like taking the last boat out of Pompeii, all while hearing Mount Vesuvius just turned off the lights behind you.

Sad for the destruction and thankful for the escape, all at once.

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Nakamoto put a reference to this page and the bailouts in the first block of Bitcoin on 03 Jan 2009

Nakamoto’s US$6 Billion Sacrifice

Knowing how Bitcoin became a store of value, shapes why it will continue to have value to the world in the future.

At first, Bitcoin was a peer to peer digital currency.

As the years passed, and the world collectively realized what Bitcoin truly was capable of, it became much more valuable — the first new store of value seen on the earth since Egyptians were painting liquid gold onto sarcophaguses 4,000 years ago.

That is the magnitude of what bitcoin has achieved in 10 years.

Nakamoto’s sacrifice of giving up his 980,000 Bitcoin, now valued at US$6 billion, and disappearing gave the first world their best chance at a new, secure, and portable store of value.

Think about it, human nature never changes. There is more than one way for a blockchain to be centralized.

What good is an electronically decentralized blockchain as a store of value if it has centralized pressure points (person, group, company) for governments and special interests to target and exert influence?

To be clear, a business or project being centralized is completely different than a store of value.

Nakamoto intentionally left himself out of the future of Bitcoin — denying every first world government the ability to exert influence on bitcoin in the future which is coming.

His sacrifice ensured Bitcoin would be leaderless, mathematically absolute, transparent, and fair.

For the first time in human history, anyone, anywhere in the world, has the same access and ability to store value which cannot be influenced by governments, geography, nationality, society, culture, religion, or politics.

Nakamoto’s sacrifice made that possible, and without it, the world wouldn’t have the store of value it desperately needs for the not so distant future.

21 Million Gold Bars

There are now 17 million Bitcoin in existence. It will take another 122 years to mine the next 4 million coins to reach total supply at 21 million bitcoin.

Estimates differ on how many Bitcoin are permanently out of circulation including Nakamoto’s 980,000, computers crashing, and private keys being lost in the early days of mining.

There could be 3 to 4 million Bitcoin lost forever, meaning there are only 13 million in circulation currently.

Only 13 million gold bars up for grabs by 7 billion people on earth.

To put the incredible odds of owning one entire Bitcoin right now into further perspective, there are 36 million millionaires in the world.

If every millionaire in the world wanted to just buy one Bitcoin, 64% of millionaires in the world wouldn’t be able to buy one whole Bitcoin.

There just aren’t enough in existence.

Financial institutions and governments understand this scarcity model even if most millionaires apparently do not.

Since they have been unsuccessful at destroying Bitcoin, the only thing left is to control the new store of value, using Bitcoin’s scarcity for their own benefit as the world continues on this unsustainable fiscal path into the future.

For example, doubt it is coincidence the SEC set the requirement “to protect retail investors” of a minimum purchase for one share of VanEck ETF to equal 25 BTC.

Driving the price high enough prevents future private ownership of entire bitcoins.

How?

The higher the prices go, the less people will want to be solely responsible for that much money on their own.

This helps ensures future retail participation is in the form of shares of funds held through retail custody solutions which institutions are currently working on now.

Most people are creatures of habit and comfort.

They’d be scared to death of having $400,000 in Bitcoin on a cold wallet in their sock drawer.

The Deadly Love Affair with the Idea of Freedom

People like their online brokerage or retirement account interface. They like being able to email or call someone when they forget their account password.

So they will prefer to use that solution for cryptocurrency and blockchain exposure as well.

Most people will never open an actual cryptocurrency exchange account, let alone have their own cold wallet, taking responsibility for their retirement savings and investments.

They just don’t have the stomach for that kind of freedom.

Just like most didn’t volunteer and go fight in Afghanistan, but love shooting fireworks and barbecuing on the 4th of July while they celebrate freedom.

Its the same thing.

Why?

Because for most people, loving the idea of freedom and the actual steps it takes to make freedom happen are interchangeable.

When in reality, nothing is further from the truth.

The idea of freedom is comfortable for everyone while the steps to real freedom are difficult and taken only by a few.

Mainstream blockchain and cryptocurrency adoption will be no different in the future.

Everyone will love the idea of the freedom it offers, but most will want it only if they can still have the comfort of a 1–800 number to call when they forget their password, and will definitely never want to handle their own private keys — that much freedom will just outright terrify them.

Most will wrongly think owning shares of a bitcoin ETF through their brokerage account will be the same as buying actual cryptocurrencies and blockchain projects themselves and keeping their investment on a cold wallet.

But it won’t be the same, and those who have physical ownership of their Bitcoin, will be owning an asset rarer than millionaires on the planet, cobtributing to the scarcity of the asset by having direct ownership of it.

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From the outstanding infographic showing how the evil Cyprus bail-in worked — source

Remember the Golden Rule — “He who has the gold, makes the rules.”

Institutions were bailed out by governments in the last financial crisis of 2008.

Governments could do this because they could create additional fiat currency.

Bitcoin is different. No more can be created. Ever.

History doesn’t repeat, but it rhymes.

Cyprus was the first time a bail-in was done in a western democracy and the world did not flinch.

Most, probably can’t even remember the year it started. That is how successful it was.

This infographic does an excellent job showing how the confiscation from people’s savings to backstop their bad policy worked.

The scope of what the institutions accomplished with the confiscation, while ensuring the elite and Oligarchs were able to withdraw billions first, is terrifying, and should serve as a warning for any assets kept through an institution into the future.

When an institution has custody of Bitcoin, then they control it, can withhold access, and even confiscate it like the Cyprus example.

This is where people mistaking the idea of freedom for actual freedom can be deadly.

As the not so distant future unfolds, the world will see what happens as first world economies unwind the experiment their central banks conducted for the last decade of artificially low interest rates and exploding sovereign deficits.

At the very least, Bitcoin offers a hedge in the event the unwinding of this global experiment does not go smoothly.

But only if a person controls their Bitcoin directly and does not use a future institutional custody solution.

A store of value is only something which a person controls, and the only thing a person controls is what they physically own.

If it is not in a cold wallet, which is in a person’s possession, they don’t own Bitcoin — the bank and the government does when they decide they need it in the future.

No cold wallet, no boat ticket out of Pompeii.

Perhaps the first world can avoid the fate of previous civilizations which marched along this treacherous fiscal path.

But just in case the first world cannot avoid the fate of previous civilizations, what is the harm with using the newest store of value since King Tut was sealed away in the Valley of Kings, happens to be rarer than millionaires on the planet, and isn’t controlled by financial institutions and governments yet as a hedge against this potential danger?

While I sip a doppio espresso in the piazza, looking up at Vesuvius smoking and wonder if there is any danger at all, and if so is it near or far, it’s nice to at least have a boat ticket in my pocket.

None of this is financial advice. Just sharing what has shaped the decisions I’ve made with my own money.

Bitcoin Part 3 is next. See you there. — Radigan