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.
Strategic Reserve
We got a US strategic bitcoin reserve!?!
Yes. It actually happened. The Trump administration declared a strategic bitcoin reserve. The move was largely a reclassification of existing bitcoin held by the US government that was attained via criminal or civil proceedings.
It was notable, however, that one of the most influential governments in the world was speaking about bitcoin, considering it to be a strategic reserve type asset, and declaring that the existing bitcoin going into the reserve would not be sold off.
It was a low hanging fruit move but it was an event where the mere act of it occurring goes a long way.
The US government is now long bitcoin.
When the ETFs launched, it took time to see additional, similar fund products hit the market but we’re starting to see that now. There’s increased interest in bitcoin, bitcoin and crypto industry, and altcoin exposure via traditional fund products. Similarly, when it comes to the strategic reserve, it’ll take time to see other countries and governments follow suit.
The usual suspects, El Salvador, Bhutan, and the like are continuing their own bitcoin strategies but something to watch throughout the remainder of 2025 and potentially during the next bear market is whether or not other governments act on bitcoin.
Macro
Global markets are volatile right now.
The understatement of the decade is that we’re in volatile markets. The Trump administration’s trade war and daily announcements regarding tariffs are sending immediate shock waves throughout global markets and we’ve entered a period of volatility that’s interrupted both bitcoin and traditional markets.
Bitcoin is still up 20% on the year and up closer to 37% since the true start of the current bull market but cautious investor sentiment amidst volatile markets could present a hurdle for further pushes to all-time highs. I still like bitcoin’s chances throughout the remainder of the year but liquidity is tight and investors are fearful.
Revisit the price levels I’m watching this cycle and looking ahead to next cycle, keep an eye on the potential second half of the bull market, and remember to always step back and consider your long term strategy. 2025 is shaping up to be a rollercoaster ride. I’m long bitcoin (as always) and tend to not deviate from my regular strategy during either bull or bear markets.
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Enjoy the weekend!
I am not an investment or financial advisor. All opinions expressed are mine alone. Read the full DISCLAIMER on the About page.
HODL on Garth.