Bitcoin Brief

Bitcoin Brief

Bitcoin Brief | June 22, 2023

The purpose of this brief is to bring everyone up to speed on the current state of Bitcoin, by providing some basic facts in one place, then we’ll break down the current bullish/bearish catalysts and narratives for Bitcoin.

General Overview

With the groundbreaking news that BlackRock has applied for a Bitcoin ETF, it has become apparent that there has been an intentional systematic dismantling of the crypto industry so larger players can swoop in and establish market dominance.

I know some people prefer to believe we live in a world where corruption is not the base case, but there is simply too much coincidence to ignore. Here is a recap of major events since the FTX collapse.

FTX Collapse - November 16, 2022

On 16 November 2022, the cryptocurrency brokerage service Genesis suspended withdrawals following FTX declaring bankruptcy, further affecting the industry.

Kraken Staking Shut Down - February 9, 2022

“Today, the SEC shut down Kraken’s staking program and counted it as a win for investors. I disagree and therefore dissent.” - Commissioner Hester M. Peirce

SVB/Silvergate/Signature Banks collapse - March 2023

On March 10, 2023, Silicon Valley Bank (SVB) failed after a bank run, marking the third-largest bank failure in United States history and the largest since the 2007–2008 financial crisis. It was one of three bank failures, along with Silvergate Bank and Signature Bank, in March 2023 in the United States. These three banks were among the few banks servicing the crypto industry.

Coinbase Served Wells Notice - March 23, 2023

Coinbase, Inc. said on March 23, 2023, that it had received a “Wells Notice” from the U.S. Securities and Exchange Commission (SEC). A Wells Notice is the SEC's last communication to a company or individual before an enforcement action.

CFTC Charges Binance - March 27, 2023

CFTC Charges Binance and Its Founder, Changpeng Zhao, with Willful Evasion of Federal Law and Operating an Illegal Digital Asset Derivatives Exchange.

SEC Charges Binance & Labels SOL, ADA, and other alts as securities - June 5, 2023

“Among other things, the SEC alleges that, while Zhao and Binance publicly claimed that U.S. customers were restricted from transacting on, Zhao and Binance in reality subverted their own controls to secretly allow high-value U.S. customers to continue trading on the platform. Further, the SEC alleges that, while Zhao and Binance publicly claimed that Binance.US was created as a separate, independent trading platform for U.S. investors, Zhao and Binance secretly controlled the Binance.US platform’s operations behind the scenes.”

June 15 forward:

BlackRock files for Bitcoin ETF

Fidelity Rumored to File for Bitcoin ETF and/or Acquire Grayscale Bitcoin Trust

WisdomTree files for Bitcoin ETF

Invesco files for Bitcoin ETF

EDX, a non-custodial cryptocurrency exchange backed by heavyweights Citadel Securities, Fidelity, and Charles Schwab, launched Tuesday

$5 trillion French asset manager CACEIS to offer crypto custody services.

Some notes:

The current incumbents in the crypto industry are being aggressively attacked while the largest financial institutions in the world are swooping in.

ETH not being labeled a security, so logically if a Bitcoin ETF is approved, an ETH ETF would be likely to follow.

BlackRock Bitcoin ETF

Why is this BlackRock Bitcoin ETF so bullish?

Assets trade based on narrative.

In order for the price of any asset to move up aggressively, demand needs to be created by people buying aggressively (duh). In order for many people to simultaneously buy aggressively, they need to feel confident they are buying at an undervalued price.

This is where “narrative” comes in. Before BlackRock applied for an ETF, there was no clear demand-side narrative that could justify Bitcoin going to 6 figures.

The only strong narrative Bitcoin really had going for it was the Bitcoin halving, which is a supply-side catalyst that is still ~10 months away.

While the BlackRock ETF is potentially 8 months away from being approved or denied, the market feels confident that it will be approved as BlackRock has a 575-1 record with the SEC when it comes to getting their ETFs approved. In other words, BlackRock gets what BlackRock wants.

Additionally, if the SEC approves the BlackRock Bitcoin ETF, they are likely to finally approve BTC ETFs for all the other applicants.

So how much demand does a BlackRock Bitcoin ETF bring in? A lot. It’s impossible to completely quantify, but with a few fair assumptions we can quickly assess that the impact would be large.

A Bitcoin ETF opens up the floodgates for retirement funds to invest in Bitcoin, giving Bitcoin the “infinite bid” that the S&P500 enjoys.

For the vast majority of people, a portion of each paycheck goes into their retirement account with a set allocation to different asset classes such as equities, commodities, precious metals, bonds, etc.

So long as people are employed, the job market is strong, and wages are high, there is a massive continual inflow of money into a core set of financial instruments, such as ETFs, designed to give a portfolio exposure to a certain asset, sector, or asset class.

It should be noted that it is not the mere existence of a Bitcoin ETF that is bullish. It is whose behind it. BlackRock is the largest asset manager with over 10 Trillion in assets under management.

They have a vast web of financial advisors who are likely to start pushing Bitcoin as a great way to “round out a diversified portfolio”. At least that’s what they did with their Gold ETF in 2004:


While BlackRock is leading the charge, the other big players are following closely behind. As of June 22, $5 trillion French asset manager CACEIS has officially registered to offer crypto custody services.

Globally, there is around $60 trillion in pension funds and $250 trillion in retirement savings. Allocations for those funds are around 3% in gold (remember the narrative is that Bitcoin is digital gold).

Remember, while Bitcoin is a ~$600B market cap asset, that doesn’t mean there is actually $600B in Bitcoin. And it will take far less than $400B in demand to push Bitcoin to a $1T assets.

The 1:0.12 value to cash ratio mentioned in the tweet above indicates that if $1B in demand were to flow into Bitcoin, the actual market cap of Bitcoin would rise By roughly $8.33B.

Now imagine $1T, or 0.4%, of that $250T finds its way into Bitcoin. Assuming the same value to cash ratio (keep in mind it would likely change), you have a scenario where Bitcoin roughly 14x’s to $420k.

This is napkin math making some big assumptions, but you get the idea. There is now a clear, plausible path to 6 figure Bitcoin where there was none before.

While the BlackRock Bitcoin ETF is extraordinarily bullish, it’s potentially 8 months away from an approval decision and there is still quite a lot of structural sell pressure:

Bitcoin Miner Overhead

There is north of $20M in sell pressure created per day to secure the network.

~900 BTC mined per day, assuming 80% is sold to cover cost of electricity from miners:

900 x 0.8 x $30k per BTC = $21.6M

Mt. Gox BTC Distribution

~142k Bitcoin ($4.26B) and 69 billion yen ($482M) from the Mt. Gox hack is expected to be distributed to creditors by October 31st, 2023.

US Government BTC Sales

The US government recovered 51,351 BTC ($1.54B) from a Silk Road hacker. 9,861 BTC has already been sold with another 41,491 BTC still to be sold (expected to be sold by the end of 2023).


The current narrative heavily favors Bitcoin over altcoins as Bitcoin is not being targeted as security and is seeing a large wave of interest from the largest TradFi institutions in the world.

The approval/denial of a BlackRock Bitcoin ETF by the SEC may remain as far as ~8 months out.

The Bitcoin halving is ~10 months out.

Both are extraordinarily bullish catalysts that give Bitcoin a clear path to $100k+ in 2024/2025.

In the meantime, there remains significant structural sell pressure from miner overhead, Mt. Gox distributions, and impending US government BTC sales.

While the current narrative is bleak for many altcoins, it should be noted that, like Bitcoin, Ethereum is not being targeted by the SEC as a security, is the most likely candidate for an ETF after Bitcoin, and does not have large structural sell pressure from miners, Mt. Gox, or the US government.

Key Takeaway: Large TradFi institutions are aggressively entering the crypto space removing doubt that there will be a 2024/2025 crypto bull market.