Fresh off the 2021 bull market, the deluge of crypto ads likely made many investors uneasy as emblematic of classic late cycle behavior, perhaps even evoking memories of the E*Trade stock trading baby making his debut in 2008 just before we would enter the Global Financial Crisis.

Adding to the uneasiness was that bitcoin at the time was already trading at $42k — 39% off its November 2021 $69k top.

In stark contrast to the fanfare of 2022, this week’s Super Bowl between the Chiefs and the 49ers had nary a mention of bitcoin nor crypto, save for Jack Dorsey’s unpaid endorsement via his wardrobe choice, which wasn’t even acknowledged on the broadcast:

And yet, as the game kicked off, bitcoin was trading at $48k — 14% higher than it was during the big game two years earlier.

Opposite of the warning signs on display in early 2022, the relative lack of exuberance in today’s market — despite bitcoin being up 122% over the past year and 16% year-to-date — can be a source of comfort for investors.

The events of the past two years, including the washing out of FTX and several of their peers — and with them a significant amount of the leverage and rehypothecated “paper” bitcoin in the system — means we are building price momentum from a much more solid base in the current market.

The current lack of retail interest is further illustrated below in the chart of the week.

Chart of the Week

source: Bitcoin Archive, Google

Google web searches for keyword “bitcoin” currently index at 19, meaning the search term is 19% as popular as it was at its 2021 peak.

Quote of the Week

“Bitcoin is just an accounting ledger.”

— SEC Chairman Gary Gensler, CNBC interview on new spot bitcoin ETFs

While we’re hesitant to agree with Mr. Gensler that bitcoin is just an accounting ledger, as it is a new technology with properties that are still being discovered, he’s right that it is a ledger.

An open, permissionless, decentralized, immutable ledger, controlled and updated by network consensus — not a few politicians and central bankers — and an improvement in many ways upon all the other ledgers that came before it.

After all, bitcoin is money. And as we discuss in our new Onramp Fundamentals Series, money is just a ledger.

Market Update

as of 2/14/2024:

Source: Onramp, Koyfin. 3-yr, 5-yr figures annualized.

Assets generally shook off a hotter than expected January CPI print to close up for the week and continue a strong start to the year. Bitcoin rallied to above $50k, a level not seen since December 28th, 2021. It remains the best performing asset in YTD and 1Y periods. US large cap stocks continued their ascent, fueled by positive Q4 earnings reports and renewed enthusiasm around the AI-theme. Small caps outperformed on the week but still lag YTD. Gold and bonds fell as rates rose in reaction to the upside surprise in inflation. Oil rallied 3.78%.

Podcast of the Week

The Last Trade E037: The Pensions Have Arrived with Sam Roberts & Glenn Cameron

This episode of The Last Trade dives deep into the fundamentals of the bitcoin thesis and its impact on asset allocation, particularly focusing on the role bitcoin can play in institutional portfolios such as pension funds. The discussion features Sam Roberts & Glenn Cameron, pension investment specialists at Cartwright UK, who detail their journey of understanding bitcoin’s unique value proposition and its implications for long-term investment strategies.

Closing Note

Onramp provides bitcoin investment solutions built on top of multi-institution custody. To learn more about our products for individuals and institutions, schedule a consultation to chat with us about your situation and needs.

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Until next week,
Zack Morris