Wednesday, June 21, 2023

A new mood, more signs of institutional interest, and more...

“All that is gold does not glitter, Not all those who wander are lost.” – J.R.R. Tolkien ||

Hi all! Happy summer solstice! This is one of my favourite days – spring weather, longer light, and a healthy reminder that we are on a fortunate ball of plasma revolving around and reliant on a glowing orb in the sky. Cosmic and humbling.

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WHAT I’M WATCHING

BTC past $29k. As I was writing this newsletter, BTC briefly popped above $29,000 for the first time since early May. There is a definite mood shift. More on this below.

Spot bitcoin ETFs. More applications are joining the queue: over the past 24 hours, Invesco and WisdomTree have filed the relevant paperwork with the SEC, requesting a rule change to allow the listing of their respective spot bitcoin ETFs. More on this below.

More signs of institutional interest. But this time, not in an ETF filing. I missed this when it was published last week: Banco Santander, the largest bank in Spain, the fourth largest in Europe and one of the largest in the world, tweeted about Bitcoin’s Lightning Network from its main handle. It’s linking to an article in a series on digital assets on its website, but it’s notable that this promotion wasn’t siphoned off into a digital assets division.

An approved US-based crypto exchange? Yesterday, we saw the official launch of a new US-based crypto asset exchange backed by some big legacy names. This is awakening an age-old debate between crypto believers and those who celebrate its “institutionalization”. More on this below.

But why. After yesterday’s good news regarding the improving relationship between the US and China following “positive” talks during US Secretary of State Blinken’s visit, Biden yesterday publicly called Chinese Premier Xi Jinping a “dictator”. It may of course be a deliberate attempt to appear chaotic for some non-obvious strategic reason. But the respect the US commands on the global political stage matters for the future role of the dollar, the smooth flow of commerce and much more.

MARKETS

Dry kindling

Finally, the market seems to be waking up. After months of lamenting low volumes and other signs of a lack of interest, BTC is up more than 7% over the past 24 hours.

(chart via TradingView)

This is largely driven by the sentiment shift triggered by signs of renewed institutional interest and the possibility of a spot BTC ETF. But there are also some structural factors in play.