Welcome to The Weekly Axis

We had some price action this week, mainly around the prospects of a spot ETF being approved. That, coupled with the macro climate led to some bullishness from the market.

We also saw some controversy due to a Wall Street Journal article, and Congress learning about the transparency of crypto.

Axis Updates

Catch up on this week’s big crypto stories.

Bitcoin's Price Surge: Macro Factors and ETF Speculation

Recently, there has been a lot of buzz surrounding the potential approval of a Bitcoin spot ETF. Now, you might be wondering, what does this mean for you? Well, let me break it down for you.

The price of Bitcoin and other crypto assets experienced a surge due to speculation about the approval of a spot ETF. This means that if the ETF gets the green light, it could open up a whole new world of investment opportunities for you. Imagine having a regulated and easily accessible way to invest in Bitcoin. It could be a game-changer.

But why is this such a big deal? Well, for starters, it aligns with the macroeconomic trends we're seeing. With inflation concerns and the search for a store of value, Bitcoin has emerged as a potential hedge. As a financial professional, you need to stay ahead of these trends and be ready to adapt your investment strategies accordingly.

Now, let's talk about supply and demand. Bitcoin has a fixed supply, with only 21 million coins ever to be created. And here's the kicker: a significant portion of Bitcoin, around 70%, hasn't moved in over a year. So, if a spot ETF is approved, the demand for Bitcoin could skyrocket, potentially leading to a significant price increase.

The Truth About Cryptocurrency for Illicit Purposes

You may have heard about the recent Wall Street Journal article claiming that terrorist organizations, including Hamas, received over $90 million in funding through cryptocurrency. This sparked a wave of concern and calls for heavy regulation from politicians like Elizabeth Warren.

But hold on a minute! Let's take a closer look at the facts. It turns out that the data presented in the article was misinterpreted. Chainalysis, a reputable data analysis company, clarified that some of the cryptocurrency funds that ended up in terrorist wallets were actually passing through exchange wallets. This means that millions of dollars were not intended for terrorists at all.

In fact, when we dig deeper, we find that only around $400,000 made its way into the hands of Hamas terrorists through cryptocurrency. And here's the kicker – Hamas themselves advised people to stop sending crypto years ago because it's so traceable. The Israeli government even stated that they are okay with terrorists using crypto because it makes it easier to track their activities.

Now, let's bring this back to our world of finance. The Senate Banking Committee recently held a meeting where some senators, clearly lacking knowledge about crypto, questioned why terrorists aren't using credit cards or banks instead. Well, the experts were quick to point out that terrorists do use those means, along with cash and other methods.

But here's the important takeaway for us financial professionals – the amount of money raised by terrorists through crypto is minuscule compared to the billions they receive from state funds and other sources. The transparency of cryptocurrency actually works in our favor. We can track every movement, every asset, and identify potential terrorist-related wallets. This makes it easier for law enforcement to catch those involved in illicit activities.

So, let's not jump to conclusions based on sensational headlines. The recent update from the Wall Street Journal acknowledges their error in reporting the numbers. It's a reminder that cryptocurrency is not the preferred choice for criminals or terrorists. Its transparency and traceability make it a poor option for illegal activities.

Stay informed, stay vigilant, and remember that crypto, when used responsibly, can be a valuable tool in our financial landscape.

New Crypto Metrics - Wallets and Crypto Movement

Let’s talk about the movement (or lack thereof) of Bitcoin and how it impacts you as a financial professional.

Did you know that nearly 70% of the world's Bitcoin hasn't been touched in over a year? Yes, you heard that right. A whopping 70% of Bitcoin holders have shown no intention of selling their holdings in the past year. And here's where it gets interesting for you.

As demand for potential spot ETFs continues to rise, we have to ask ourselves, where will the supply come from to meet this demand? Will it come from those long-term holders who have been patiently waiting for the right moment to sell? Or will it be driven by newer investors who are actively trading and taking advantage of the proposed spot ETF?

This is where your expertise as a financial advisor comes into play. You need to consider these new metrics and data that we now have access to, thanks to the transparency of blockchains. We can analyze the ownership of crypto assets, identify patterns, and make informed predictions about future price movements.

Think about it. We can look back at historical data and see what happened when the percentage of untouched Bitcoin reached certain levels. We can also speculate on how many of these holders bought at the peak of $69,000 or even at $20,000 and have been holding on through the rollercoaster ride of ups and downs.

But here's the kicker – this is new territory. We haven't had this level of information and insight into assets like we do with cryptocurrencies. It's a game-changer for financial professionals like you. You now have the opportunity to leverage this data to guide your clients, assess allocation risks, and develop intelligent strategies.

Understanding these additional metrics and their impact on prices is crucial. It allows you to read the market, conduct thorough due diligence, and engage in meaningful conversations with your clients. You can help them navigate the world of crypto assets, determine where it fits in their portfolio, and develop a solid plan for the future.

So, as a financial professional, it's essential to stay informed about these new metrics and data points. Embrace the transparency that blockchain technology brings and use it to your advantage. The crypto landscape is evolving, and you have the opportunity to be at the forefront of this exciting revolution.

Keep exploring, keep learning, and keep empowering your clients with the knowledge they need to make informed decisions in this ever-changing world of cryptocurrencies.

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Thanks for reading.

— Adam