How big is the Grayscale Bitcoin Trust?
Also the stocks vs bonds correlation is making a comeback and MicroStrategy is winning.
Welcome to the Friday edition of the Ecoinometrics newsletter.
Every week we bring you the three most important charts on the topics of macroeconomics, Bitcoin and digital assets.
Today we'll cover:
The Grayscale Bitcoin Trust is huge.
The stocks vs bonds correlation is making a comeback.
MicroStrategy is winning.
Each topic comes with a small explanation and one big chart. So let’s dive in.
In case you missed it, here are the other topics we covered this week:
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The Grayscale Bitcoin Trust is huge
If you follow the Bitcoin ETF news you have seen some good development this week. The SEC is in discussion with Grayscale on the conversion of their trust, the Grayscale Bitcoin Trust (GBTC), into a bona fide ETF.
But in case you didn’t know, GBTC is already a huge pseudo-ETF product.
How huge? Two stats:
It has ~$25 billion in assets under management. For reference that’s half of the size of the GLD gold ETF.
It controls ~620k Bitcoins. That’s more than half of what Satoshi Nakamoto is thought to control.
So good luck to the other ETF providers who will try to catch up with them. First mover advantage.
The stocks vs bonds correlation is making a comeback
The 60/40 portfolio is in part built on the premise that stocks and bonds tend to be anti-correlated. The problem is that they aren’t anti-correlated all the time.
Tough luck for those who have been stuck with the portfolio in the post-COVID world.
Because for the most part after the end of the zero interest rate era bonds and stocks have been in free fall together.
At least until April this year. That’s when stocks and bonds started to diverge again. Despite the Federal Reserve pumping the brake of the economy stocks started to defy gravity.
This rally was so large than it almost looked like we were going to see a new all-time high.
Except that only lasted one quarter. And now stocks and bonds are once more following the same path, reacting the way to the same events.
Rest in peace 60/40 portfolio.
MicroStrategy is winning
Only a month ago we were talking about MicroStrategy being back to the break even point on their Bitcoin holdings.
Well now they are up ~25% on it. And for the size at which they operate, 25% is already no pocket change. We are talking about being $1 billion in the green.
But of course that’s not enough for Michael Saylor.
So what is he doing right as Bitcoin is pumping? He is “dollar cost averaging” more coins into the MSTR coffers. You have to admit the man is consistent.
I think there is an investing lesson here:
Make bold bets.
Give them time to play out.
Be consistent about your execution.
That’s it for today. I hope you enjoyed this. We’ll be back next week with more charts.
Cheers,
Nick
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Our objective? Deliver to you the most important insights in macroeconomics, Bitcoin and digital assets.
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Hi Nick , possible to get the bitcoin price halving chart with an uptade after December 2023 ? Cheers