Rates Push Higher; BTC Doesn’t Care.
“You can avoid reality, but you cannot avoid the consequences of avoiding reality.” — Ayn Rand
After 2 months soaking up the sun in Florida, I’m back in Toronto. I don’t exactly know how to feel about it but I guess it’s kind of nice to get back to reality… I’m only 6 days into my 14 day sentence so apologies in advance if next week’s letter seems a little dark.
The markets were all over the place this week as investors were watching the 10 year treasury yield continuing to creep up. Most people are surprised that Bitcoin has been able to stay strong in this environment since rising rates should mean less need for a hedge. However, yields are still abysmally low and will continue to be suppressed for a long time and it’s hard to believe that they will ever outpace the rate of inflation.
In the long run, this is all noise. The bottom line is institutions are here and their buying power is taking precedence over other narratives. Bitcoin has solidified itself as a precious asset that everyone wants — there’s not much to go around.
What we saw at the desk
This week might have been the biggest we’ve had to date. We helped yet another publicly traded company buy $12m USD in BTC for their treasury, and had other large purchases come across the desk — mostly in Bitcoin.
Two pieces of news stood out this week that got our clients (and us) excited.
- Morgan Stanley will now offer their clients access to Bitcoin funds. The $4 trillion-asset manager will be the first major bank to offer Bitcoin exposure.
“The move, a significant step for the acceptance of bitcoin as an asset class, was made by Morgan Stanley after clients demanded exposure to the cryptocurrency”
2. VISA to enable bitcoin purchases at 70M merchants.
“We’re trying to do two things. One is to enable the purchase of Bitcoin on Visa credentials. And secondly, working with Bitcoin wallets to allow the Bitcoin to be translated into a fiat currency and therefore immediately be able to be used at any of the 70 million places around the world where Visa is accepted.
Bitcoin has a serious unit bias
Whoever needs to hear this: YOU DO NOT HAVE TO BUY A FULL BITCOIN!
We called our company Satstreet because we knew where this was going. A Sat is the smallest unit of a bitcoin — like a penny to a dollar, except there are 100 million Sats in 1 bitcoin (check out DON’T BUY BITCOIN! Buy Sats.). We believe that eventually (maybe sooner than later) Sats will be the standard when referring to average amounts of bitcoin. Right now the conversion is $1 USD = 1,755 Sats and if you’re sending your friend $20 bucks in BTC it’s easier to say 35,300 Sats than 0.000353 BTC.
The point is you shouldn’t feel like you need to buy a whole coin. We’re so early in bitcoin’s lifecycle that any amount purchased is relatively significant if you believe in its long term potential. Each time you buy any amount of bitcoin, it’s an amount no one else can ever have unless you sell it or give it away. When you buy $10 worth of BTC you have a little piece of the most precious asset in the world. The difference for most people is that it’s hard to appreciate it because it’s digital and you can’t see or feel it vs. something like gold — that’s how early we are.
We may be early, but we’re maturing very quickly. Institutions are opening the door for other institutions to claim their territory on the blockchain. MicroStrategy paved the way for Square, Tesla, Aker, Meitu, and many more to come. After this week, Morgan Stanley will pave the way for Goldman Sachs, JPMorgan, Citibank, Merrill Lynch, and many more. Everytime you buy some bitcoin, you take a little piece away from big institutions scrambling to try to wrap their heads around it or convince their board to sign a resolution to allow them to buy this pristine asset that only now people are starting to understand.
Do the hard work and really learn about Bitcoin. Then, stack Sats.
In case you missed it…
- Morgan Stanley turns bullish on Bitcoin https://www.cnbc.com/2021/03/17/bitcoin-morgan-stanley-is-the-first-big-us-bank-to-offer-wealthy-clients-access-to-bitcoin-funds.html
- VISA to enable bitcoin purchases at 70M merchants https://www.btctimes.com/news/visa-plans-to-enable-bitcoin-purchases
- Deutche Bank — Bitcoin is too important to ignore https://t.co/hnZewnWENt?amp=1
- The Square Crypto Book of Bitcoin Mythology: Bitcoin Mining https://bitcoinmythology.org/#warewolves-1
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Satstreet serves private Canadian clients including some of the largest Bitcoin mining operations, institutions, and high net worth individuals. Satstreet has raised initial funding from Round13 Capital and several prominent investors.