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HEALTH, WEALTH, AND HAPPINESS

April 19, 2022

"We all need to look at history

What we'll find is, that it's repeating

It won't change 'til we all come together.

Together we gonna rise to the top."

- Cory Henry and the Funk Apostles, Rise

Our official playlist: High-energy music to help you "rise up" to meet the challenge of investing for the long term.

Our Blockchain for Everyone playlist is available for free on Spotify. Click here to listen.

Whale Reads

Worthy news for aspiring whales

Decade Wealth (Bankless): At Bitcoin Market Journal, we're big believers in long-term crypto investing, as it's one of the best-performing asset classes of the past decade.

This article makes the case for having a decade time horizon, as we'll see a massive transfer of money over the next ten years. Don't think overnight wealth, think "decade wealth."

Investor takeaway:

Don’t pursue overnight wealth in crypto. You’ll probably fail.
Do pursue decade wealth in crypto. You’ll probably succeed.

Your Money is Growing

Truth, in numbers

How many people are actively using bitcoin?

To find out where we are in the "Decade Wealth" cycle, we can use Daily Active Addresses (DAA). It's a powerful metric for blockchain investors, as it shows how many people are actually using it:

Courtesy Coin Metrics, CoinMarketCap

Comparing daily active users (top chart) with price (bottom chart), it's encouraging to see that usage is not just following price. Since October 2021, for example, daily users have held steady, even when price has been a rollercoaster.

Investor takeaway: Bitcoin appears to be gaining more everyday use, which is a positive sign for decade-long investors. Rule of thumb: the more users on a blockchain, the more valuable it becomes.

The Big Picture

with Evamarie Augustine

Hi Everyone,

The U.S. Securities and Exchange Commission recently approved yet another bitcoin futures ETF. But while spot bitcoin exchange-traded funds are available in other countries, U.S. investors are still waiting.

Investors across Europe, Canada and Brazil can all invest in a spot bitcoin ETF. In fact, the U.S.’s northern neighbor has several crypto-focused spot ETFs trading on the Toronto Stock Exchange with billions of dollars in assets under management. One of the most recent approvals was the launch of the Fidelity International Physical Bitcoin ETF in Europe.

Why a Spot Bitcoin ETF?

An ETF tracks the performance of an underlying investment or group of financial instruments, enabling investors to gain exposure to an asset class without holding the asset itself. ETFs are used by not only individual investors but also by fund and hedge-fund managers. Since the first ETF was launched in 1993, the market has grown tremendously, reaching over $10 trillion in 2021.

Currently, there are several future bitcoin ETFs trading in the U.S. But while a futures ETF tracks the price of bitcoin futures, it is not directly correlated to the sometimes volatile price of bitcoin.

A futures-based ETF tracks a derivative of bitcoin rather than the actual asset. According to CoinDesk Learn, “Bitcoin futures may diverge from the spot price of bitcoin due to the prevailing market sentiment, so bitcoin futures ETFs might also occasionally track the price of bitcoin inaccurately.”

Reading the Numbers—‘33 or ‘40

While the three existing bitcoin futures ETFs were filed under the Investment Act of 1940, the latest from Teucrium Bitcoin Futures Fund was filed under the Investment Act of 1933. So why does this matter?

The United States has a variety of regulations when it comes to investment products. As the primary act for investment funds, the protections granted under what is commonly known as the ‘40 Act provide a higher level of investor protection. Specifically, the SEC has noted enhanced custody of fund assets, valuation and liquidity rules not covered under the ‘33 Act.

The approval of an ETF filed under the ‘33 Act, Grayscale CEO Michael Sonnenshein believes is a major step forward for the approval of a spot bitcoin ETF.

What Say the SEC?

The SEC has already rejected several ETF applications, most recently from Ark21 Shares.

While the SEC doesn’t appear to be in a hurry to approve any spot ETFs, there are dissenting opinions—most vocally from SEC Commissioner, Hester Peirce. Peirce has publicly questioned the reasoning behind the SEC denying spot ETF applications.

The approval of a spot bitcoin ETF can provide investors with the opportunity to own bitcoin as well as the ability to purchase through an existing brokerage account.

The SEC’s main concern in approving a spot bitcoin ETF is the lack of consumer protection. But as the number of individuals owning bitcoin grows substantially, and other countries approve spot bitcoin ETFs, is the SEC missing the mark?

I appreciate all your likes, follows and comments! As always, thank you for reading, and I look forward to hearing your feedback.

Make it a great day!

Evamarie Augustine

Market Analyst

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Bitcoin Market Journal is a daily newsletter that makes you a better crypto investor. It is created by Evamarie Augustine, Charles Bovaird, Mati Greenspan, John Hargrave, and Alexandre Lores.

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