Look Further

It goes without saying, all cylinders are firing in the world of crypto right now.

Bitcoin is hitting new all-time highs with each passing day. BTC was trading at $91,000 when we started putting these thoughts together this morning. Just one cup of coffee later, it was at $93,000.

Feeling a bit anxious? Checking prices more often than usual? Longtime bitcoin holders know this feeling very well.

In times of intense volatility and prices smashing through record highs – it's easy to feel swept up in a wave of irrational exuberance.

But here's the reality: your perspective might not be long-term enough.

$100k bitcoin is no longer a pipedream. It's right there for the taking.

But why stop there? $200k? $500k? Now we're talking.

Given the surge of inflation in recent years, these numbers shouldn't be as daunting as they may seem. And while Trump and some members of Congress are now acknowledging bitcoin, that doesn't mean we're no longer "early."

Put simply, there are so many positive developments happening right now beyond "number go up" – some we covered last week and others we'll touch on below.

But the bottom line is that it's time to expand your mental milestones.

Zoom out, if you will, and consider that only ~3% of the global population owns bitcoin. If you're a whole-coiner, congrats – you're in the top .05%! Millions of Americans still don't even know how it works.

Consider this, too: governments hold roughly 20% of the world's gold reserves, while they control less than 2% of bitcoin. Financial institutions have barely scratched the surface in terms of involvement.

The further you zoom out, the clearer it becomes: crossing $100,000 is less of an achievement and more of a mathematical probability.

As always, don't do anything irrational in times like these. Don't chase moonshots, watch out for the scams and the shady actors taking full advantage of the frenzy, and certainly don't panic sell if there's a quick turnaround.

Slow and steady will win this race.

📚️ Further Reading:
While we’re on the topic of zooming out, we’ll share some of our favorite reads/clips from the past few days that may help expand your horizon:

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Coinbase is Cookin’

In 1976, Vanguard created the first S&P500 investment vehicle. And while it took over 20 years for passive funds to catch on, they now have nearly $6 trillion invested in them.

To put that in context, the total market capitalization (even with the recent price run-up) for all cryptoassets is only $3 trillion.

And while bitcoin and ethereum dominate the market cap – at 60% and 13%, respectively – one would expect these two assets to slowly lose their relative dominance over time.

Still, when most investors consider crypto an investment class or benchmark, they primarily compare it to BTC and ETH.

However, as the market cap for all of crypto grows, new projects are launched, and as institutional investors become more involved in the space, using Bitcoin as the only benchmark becomes untenable.

That’s why Coinbase, in partnership with MarketVector, has introduced the Coinbase 50 Index (COIN50), a crypto-focused benchmark that the companies hope will be the industry standard.

Here’s How it Works

Coinbase has taken the thousands of potential tokens and narrowed them down based on certain fundamental factors.

Coinbase is quick to point out that with these rules, protocols like Terra Luna (LUNA) and FTX’s native token (FTT) – which both spectacularly failed – would have been excluded from COIN50 based on these rules.

Lastly, the index has a cap of 50% for any single token. With Bitcoin representing nearly 60% of total crypto market cap, this means that the other 10% will be distributed proportionally among the other index components.

This is different than say the Bitwise 10 Crypto Index Fund (BITW), which is limited to 10 assets and has no cap on asset percentage (bitcoin represents 75% of BITW).

Can You Trade COIN50?

Like most innovative things in this god-forsaken country, retail investors in the U.S. are not allowed to trade COIN50.

As of yesterday, only eligible Coinbase International Exchange or Coinbase Advanced investors can trade COIN50 as a perpetual futures contract (COIN50-PERP) with up to 20x leverage.

However, we should expect new ways to trade the index soon.

Why It Matters

For most of the retail investor community, keeping up to date with anything more than Bitcoin is a chore. While investor’s hear about the latest smart contract play, DeFi protocol, or memecoin, taking a risk on a random one is just that – a risk.

But with a tradable index like COIN50, investors would be able to get exposure to a large swath of the crypto industry in a diversified fashion much like the S&P or NASDAQ.

COIN50 investors wouldn’t have to:

What Gets Us Excited

In the future, it may just be possible for an tradable index based on COIN50 to offer yield on the investment.

Because Coinbase currently offers yield on seven of the 50 assets in the index, there could be a day when investors are able to hold a diversified basket of digital assets that pay a dividend that could be taken or re-invested.

Your writers at CoinSnacks crunched the numbers. By our account, COIN50 would currently have a 1.1% yield. The S&P 500 yield by comparison is currently 1.2% – the lowest in more than 20 years.

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About CoinSnacks

Launched in December 2017, CoinSnacks is home to the longest continuously running crypto newsletter. Each week, we publish our cryptoasset musings to an audience of 35k+ crypto enthusiasts and investors.

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