The Weekly (3/1)

If you’ve opened a financial news app or your #social-random company Slack channel in the last week or so, you’ve certainly seen the buzz surrounding the surge in Bitcoin prices (h/t WSJ, FT, Bloomberg). 

Starting the week at ~$51,000, Bitcoin has surged above $60k and is fast approaching its all-time highs from 2021. The performance this week follows a 30%+ rise year-to-date and a ~150% increase over the last year.

We don’t blame the news outlets, though. Bitcoin is having its IPO moment.

The SEC’s approval of spot Bitcoin ETFs has allowed the largest financial institutions like Fidelity, Blackrock, and more to offer exchange traded funds linked to the underlying price of Bitcoin just like any other security. The SEC’s green light, in many ways, could be viewed as the cryptocurrency’s ‘public offering’.

For years, the benefits of Bitcoin were only accessible to some. Now, it can be easily purchased by the public in a matter of one click in a brokerage account. Furthermore, it may be even recommended by some financial advisors as a non-correlated ‘call option’ on future growth.

What’s interesting, but not surprising, is the extent to which the recent entrants are moving markets.

With a steady amount of inflows from consumers who once didn’t have access to the asset class, ETF issuers are buying up around 11x more Bitcoin than miners are producing. It’s been a common trend since their launch but day after day, it continues to impress.

If the approval and launch of Bitcoin ETFs were Bitcoin’s IPO moment, perhaps Bitcoin’s upcoming halving in mid-April will be its next major “stock buyback”? 

If so, we think that might be quite bullish for its price.

For context: Bitcoin halving is a mechanism built into the code of Bitcoin that cuts the rate at which new Bitcoins are created by half every 210,000 blocks mined (roughly every four years).

Historically, these halving events have been catalysts for significant movements in Bitcoin’s price. Simply put, a slower rate of new Bitcoins entering circulation typically creates scarcity that has led to price jumps – similar to what we’re already seeing with these ETF entrants. 

This is a bit like when a public company announces a stock buyback plan — it reduces supply of shares which, all else equal, can increase the stock’s price per share.

Supply and demand remain the governing forces of markets. 

With decreasing supply and clearly increasing demand for Bitcoin, the stage is set for a very eventful 2024.

Have a great weekend,

– Your Titan team

Disclosures:

As of writing, IBIT is a holding in Titan Crypto.

*Earn 6.00% on your first $250,000 of cash. Above $250,000, you'll earn the current yield offered by Smart Cash. 6.00% is gross yield and does not consider the annual Titan Advisory Fee of 0.25% that applies to new clients as of 01/02/2024. Terms apply.

Advisory services are offered by Titan Global Capital Management USA LLC (“Titan”), an SEC registered investment adviser. Titan’s affiliate, Titan Global Technologies LLC (“TGT”), is a registered broker-dealer and member of FINRA/SIPC. Newsletters provided by Titan reflect the opinions of only the authors who are associated persons of Titan and do not reflect the views of Titan, or any of its subsidiaries or affiliates. They are meant for educational and informational purposes only, are not intended to serve as a recommendation to buy or sell any security and are not an offer to buy or sell a security. They are also not research reports and are not intended to serve as the basis for any investment decision. The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person. Any third-party information provided therein does not reflect the views of Titan or any of its subsidiaries or affiliates. All investments involve risk, and the past performance of a security or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not ensure a profit or protect against loss. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and clients may lose money, including their original investment and principal. Any rewards or free trials offered through Titan's client referral program are subject to full program terms & conditions.

Titan newsletters are curated digests of business news stories delivered daily. Titan newsletters’ goals are to make business and financial news accessible to all. The Titan newsletter team has editorial independence. Authority over all news decisions that appear in Titan newsletters, including what news we cover, our tone, and any accompanying media, lies with the Titan news team. Titan newsletter editors conduct daily research through a variety of primary (e.g., press releases, financial reports, public statements, economic data, social media accounts, interviews, etc.), and secondary sources (e.g., Fortune, The Wall Street Journal, The New York Times, Bloomberg, CNBC, TechCrunch, Jalopnik, Business Insider, Fox Business, etc.). The editors then determine the stories to be featured, covering a mix of headline news as well as less reported, yet relevant stories. Titan can’t cover everything, but the Titan newsletters aim to deliver a well-rounded serving of news. Titan newsletters make every attempt to report the facts fairly and accurately and provide “Takeaways” based on our understanding of the trends, our business experiences, and our personal opinions. We deliver the crucial information and our unique perspective so you can assess the news critically. Titan newsletters may contain forward-looking statements, which reflect the author’s current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. We do not undertake any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Smart Cash is offered by Titan as one of its RIA product offerings. Titan's Smart Cash strives for tax optimization; after-tax yields are estimates, and actual outcomes may vary. Yields are subject to market conditions, will fluctuate, and are not a guarantee or forecast of future earnings. While Titan can provide general tax information and guidance, any information provided should not be taken as tax advice as Titan is not a tax professional. Consult a tax professional for personalized tax advice. View Smart Cash risks and disclosures at titan.com/smart-cash-disclosures.

Various Registered Investment Company products (or “Third Party Funds”) are offered by third-party fund families and investment companies on the platform as one of many potential investment options available to Titan’s clients, that may or may not be recommended based on an individual client’s investment objectives and risk tolerance. Certain Third Party Funds are offered through Titan Global Technologies LLC. Other Third Party Funds are offered to advisory clients by Titan. The Third Party Funds that are available on the platform are interval funds. Investments in interval funds are highly speculative and subject to a lack of liquidity that is generally available in other types of investments. Actual investment return and principal value is likely to fluctuate and may depreciate in value when redeemed. Liquidity and distributions are not guaranteed, and are subject to availability at the discretion of the Third Party Fund. Please review the Third Party Fund’s prospectus, available on www.titan.com, in its entirety for a full list of risks associated with investing in the interval fund before making any investment decision.

Investments with exposure to crypto assets are only suitable for investors who are willing to bear the risk of loss and experience sharp drawdowns, as they still carry inherent risk associated with cryptocurrencies. You are solely responsible for evaluating the merits and risks associated with the use of any information, materials, content, user content, or third party content provided before making any decisions based on such content.

If there are substantive errors when published, corrections will appear in the following day’s material or within a business day of discovery of the error. When Titan or the author of a newsletter owns stock in a company mentioned, we’ll disclose it at the bottom of our newsletter.