4 Key Topics
ETFs
Halving
Strategic Reserve
Macro Environment
What’s happening in bitcoin?
It’s been a big year in bitcoin’s 16 year history, complete with increased institutional adoption and volatile markets often seen during a bull run.
ETFs
Last January, nearly a dozen spot bitcoin ETFs launched in the United States.
Among my early thoughts on their launch was the idea that it would take time for us to feel their impact and see how their performance tracks against one another.
I also thought there would be clear winners as time went on in terms of assets under management. For the rest of those early thoughts, revisit this post.
More than a year later, BlackRock’s IBIT product has more than twice the assets under management than the second most popular ETF. IBIT is the clear winner. Fidelity has impressed and both Ark Invest and Bitwise have performed well enough to be considered reputable competitors.
The ETFs are also largely tracking within half a percentage point of one another on any given day. It took time for their performance to line up though and it’s important to note that even small outperformance can make substantial differences over time so performance is something to keep watching.
Institutions
The ETFs were a green light for increased institutional adoption. That said, it was still primarily retail and small family offices leading the charge.
As 2024 went on, the ETFs quickly became the most successful ETF launches in history with IBIT, for example, now approaching $50 billion in assets.
Many financial advisors are not yet allocating to or recommending the bitcoin ETFs to their clients. If they are, it’s in small percentages (1-2%). Further adoption and mainstreaming is needed before we see larger scale adoption from financial professionals and the open-mindedness from other large institutions to allocate more significant positions using the ETFs.
Halving
April 2024 marked the 4th halving.
The 4th bitcoin halving was a big one. It took the total bitcoin mined daily down from 900 all the way to 450. Halvings cut the block reward earned by miners for their effort processing transactions in half so it’s not new but we’re at a point where almost 95% of all bitcoin has already been mined.
A supply shock was felt leading up to and following the halving but it’s typically 6 to 18 months after the halving when the broader market understands the halving more and begins to really price it in.
The point is—there’s not a lot of new bitcoin to go around so the market is increasingly competitive.
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