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- Bitcoin vs.
- How to Buy ‘BTC’
- Bitcoin Whitepaper
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Truly disruptive technologies that have the potential to change the world do not arise every day. Among the current crop of those seen as most promising (e.g., robotics, artificial intelligence, gene editing), there has been one mainstay for multiple years now that is constantly touted as having the ability to change how humans transact value on a global scale – Bitcoin (BTC).
In its latest report titled ‘Big Ideas 2024‘, Ark Invest took the time to highlight the world's most popular digital asset and its potential for another breakout year. While BTC's maturation into a ‘reliable risk-off' asset will, no doubt, play a role in this, the popular investment firm noted a few key factors why it believes this to be the case.
Factors to Consider Surrounding Bitcoin (BTC)
As stated, a few key factors are set to play a role in Bitcoin's continued rise to prominence. While individually, these are each bullish developments for the network, things get even more exciting when viewed as a whole.
Buoyancy and Regulation
For the past couple of years, various anchors have weighed down Bitcoin and the broader digital asset market. The largest of these included debacles like the collapse of FTX, Genesis, BlockFi, and more.
Moving into 2024, the market is finally being provided with various levels of resolution regarding these events. FTX clients are expected to be paid back in ‘full', Genesis has come to terms with Gemini Earn users, and BlockFi will soon begin disbursement of funds to its affected clients. Essentially, these events that have weighed down the industry with uncertainty for so long are all coming to an end in a quick fashion, allowing for the focus to shift back to positive network development and adoption.
Furthermore, each of these events highlighted the need for some level of regulation involving digital assets. While there have been various misguided attempts to pass laws that would essentially kill the industry in the U.S., hope remains that a thoughtful approach could foster safe markets without stifling innovation. Regardless, any clarity is better than none and should help illuminate a path forward for those waiting on such judgment.
Increased Accessibility to Bitcoin (BTC)
For the forward-thinking few, Bitcoin (BTC) is already one of the most accessible high-potential assets in the world. Not only is it a truly global asset that is not restricted to the confines of U.S. borders, but it can be directly purchased in any denomination at any time and by anyone. Few, if any, other assets in the world can make such claims. Despite this, accessibility can always be improved, and that is exactly what the launch of Spot-BTC ETFs look poised to do.
With the launch of such products, accessibility is more easily afforded to institutional investors, pension plans, and more. To wit, popular Bloomberg analyst Eric Balchunas recently noted that in only its first 17 days of operation, Blackrock's spot-BTC ETF, $IBIT, managed to pull in more than $3.2B, which is more than 99.98% of all ETFs for the year, and places it at #5 out of #3109 for 2024. This shows a massive interest in the underlying product within a previously untapped demographic that is only now gaining access to it.
The Bitcoin (BTC) Halving
One of the main appeals behind Bitcoin (BTC) is its known emissions schedule. There is no Federal Reserve behind the scenes opting to print more BTC on a whim to fund political motivations. Instead, the network boasts fixed emissions that are cut in half every ~4 years, like clockwork, until there is no more BTC to be released. This schedule does not falter or flinch – it is known.
With that in mind, the next of these halving events is set to occur in Q1 of 2024 and will see block rewards cut in half. This means that when the change occurs, the available new supply of BTC is instantly halved, and mining costs essentially double.
What makes this halving particularly interesting is its alignment with the recent launch of the aforementioned ETFs. Simply put, the available supply of new Bitcoin will become scarcer than ever before when demand is skyrocketing. Unless another FTX event occurs and destroys market sentiment, many foresee the upcoming supply/demand ratio as, arguably, the main factor for anticipated price appreciation over the coming year.
Recognition and Acceptance
Finally, one of the various factors noted as a potential catalyst for Bitcoin (BTC) in 2024 by Ark Invest is institutional acceptance.
In early 2023, while various U.S. banks were in the midst of a collapse, Bitcoin (BTC) acted as a safe harbor for many. While the reasons for this are varied (liquidity, accessibility, fixed supply, etc.), the take-home point is that in a time of uncertainty, the asset was viewed and treated by many as maturing into one that is ‘risk-off'.
Since these events, this perception has continued to solidify, culminating in a stark change in the narrative being pushed by some of the world's most prominent investment firms. Arguably, the most notable example of this comes from commentary shared by Blackrock CEO Larry Fink, who has stated on multiple occasions that his firm (which is the biggest investment firm in the world by assets-under-management) full-heartedly believes that Bitcoin (BTC) is digital gold, and its increased acceptance marks a ‘flight to quality'.
The Big Picture
As mentioned, each of the listed factors alone is a bullish development for Bitcoin (BTC). When considered as a whole, though, the long-term potential of the network remains tantalizing. Although there may be hiccups on the road to the next all-time high (i.e., Genesis offloading GBTC holdings), these should be short-lived events with no bearing on the network in time. With market peaks typically occurring ~8-10 months after each halving, the efficacy of Ark's analysis on potential key catalysts should be proven before the year is out.
Industry Players Tied to Bitcoin (BTC)
For those who believe in the future of Bitcoin (BTC) and recognize the potential for 2024 to be a bullish year for the world's leading digital asset, the easiest way for exposure is to purchase BTC directly. Investing in Bitcoin (BTC) does not end there, though, as a plethora of companies are hard at work building out and offering fundamental platforms to service the growing industry. The following are a few examples of companies that believe in Bitcoin (BTC) and can provide investors with indirect exposure to the market.
*Figures provided below were accurate at the time of writing and are subject to change. Any potential investor should verify metrics*
|Earnings Per Share (EPS)
As one of the leading cryptocurrency exchange platforms, Coinbase benefits from the broader adoption and price movements of Bitcoin and other digital assets. By investing in COIN, investors gain exposure to the cryptocurrency market's growth potential through a regulated, publicly traded company.
This approach offers the dual advantages of participating in the crypto economy's upside while mitigating some of the risks associated with direct cryptocurrency ownership, such as security and regulatory challenges.
Additionally, Coinbase's expanding suite of services, including institutional brokerage and custody services, positions it well to capitalize on the increasing institutional interest in cryptocurrencies, making it an attractive option for investors looking to leverage the growth of the digital asset sector.
|Earnings Per Share (EPS)
MicroStrategy has distinguished itself as a corporate entity holding a significant amount of Bitcoin on its balance sheet, effectively making its stock a proxy for Bitcoin investment.
By purchasing MSTR shares, investors can indirectly participate in the Bitcoin market, benefiting from the cryptocurrency's price appreciation while also diversifying their portfolio through a company with a core business in enterprise software and cloud-based services. This strategy allows investors to mitigate some of the volatility and security concerns associated with direct cryptocurrency investments, leveraging MicroStrategy's substantial Bitcoin investments as a hedge against inflation and a means to increase digital asset exposure within their investment portfolio.
MicroStrategy's aggressive acquisition of Bitcoin underscores its bullish outlook on the cryptocurrency, providing a unique investment avenue for those looking to capitalize on the digital currency market without directly holding the assets.