Market Update

As a result of major unfolding events, the digital asset market has been highly volatile. Bitcoin came close to its all-time high but failed to break the $70k resistance, dropping to its current price of $66,444. The U.S. government’s movement of $2 billion in Silk Road Bitcoin likely triggered this 4.5% dip, sparking renewed fears of a potential sell-off.

Bitcoin Weekly Price Chart

Bitcoin Conference 2024

The world's largest Bitcoin conference just took place in Nashville, with over 35,000 attending and hundreds of thousands tuning in from home. The main event was Trump's speech on Sunday, where he promised the Bitcoin community a future of growth, "one that will rocket" under his leadership.

Trump Promises Bitcoin to the Moon

Perhaps the greatest promise received by the crowd of Bitcoiners came from Trump vowing immediate action against the current SEC chairman, Gary Gensler, who Trump promised to fire on day one in office. "The moment I'm sworn in, the persecution stops, the weaponising ends against your industry. "I will appoint a new SEC chairman who believes that America should build the future, not block the future".

This is particularly bullish for the crypto industry because having regulatory rules written by individuals who are supportive and understanding of the industry could lead to a more favorable regulatory environment.

A new SEC chairman with a pro crypto stance would likely implement regulations that encourage innovation and growth rather than stifle it. As seen since 2017 US crypto developers have decreased from 40% of global share to 18%.

This shift in SEC could attract more institutional investment, foster the development of new technologies, and enhance the legitimacy and acceptance of cryptocurrencies. Overall, it could significantly boost market confidence and drive the next wave of adoption and growth in the crypto space.

USA will hold Bitcoin as an Asset

Trump urged listeners and Bitcoin holders not to sell their Bitcoin, speculating that it could one day surpass gold's market capitalisation. Currently, gold's market cap is approximately 11.5 times that of Bitcoin, which would suggest a price of $763,000 per Bitcoin if it were to match gold's market cap.

He also confirmed our speculation from last week's newsletter that, under his leadership, the government will retain 100% of its current 200,000 BTC, transferring it into a strategic reserve as an economic asset. This move is a significant step towards bringing crypto out of the shadows of global acceptance uncertainty and into the mainstream, solidifying it as a mature and trusted global investment asset.

USA to Accumulate 1,000,000 Bitcoin

Senator Cynthia Lummis’s proposal for the U.S. to accumulate 5% of the total Bitcoin supply, amounting to over 1,000,000 BTC, as a strategic reserve represents a significant development for the digital currency space.

This move would validate Bitcoin as a global financial asset, potentially driving other nations and institutions to follow suit. It could significantly impact the market by increasing demand due to the large amounts of daily buys and reducing Bitcoin’s supply, which would likely push its value higher. Additionally, this shift would indicate a broader acceptance of digital assets in national reserves, enhancing U.S. influence over the global Bitcoin market and future digital currencies.

This could be a strategic move by the U.S., especially in light of VanEck’s forecast, which estimates that Bitcoin could reach anywhere from $2.9 million to $52 million per coin by 2050. This would value the U.S. strategic reserve between $2.9 trillion and $52 trillion. While realizing this forecast involves various factors, VanEck's CEO has shown strong confidence, revealing that over 30% of his personal investment portfolio is allocated to Bitcoin.

Where does Kamala Harris stand with Crypto?

Kamala Harris’s advisors have begun efforts to strengthen ties between her Democratic party and the cryptocurrency industry, which now may notably lean towards presidential rival, Donald Trumps. Recently, members of the vice president’s team have engaged with prominent figures in the crypto sector to explore potential meetings. Key players involved include Coinbase, a leading exchange, Circle, a major stablecoin issuer and Ripple Labs, a prominent blockchain payments company.

Ultimately Kamala’s stance on crypto is currently unknown and it is anticipated that Kamala will withhold a public stance on cryptocurrencies until she secures the Democratic nomination. This nomination is expected by August 1st. If more than one candidate qualifies, voting will commence on August 3rd.

Hong Kong pushing to add Bitcoin as an Asset

Shortly after Trump's speech, Hong Kong legislator Johnny Ng proposed that Bitcoin be used as an official financial reserve for the region. “The global acceptance of Bitcoin is constantly increasing, and Bitcoin is regarded by the public as 'digital gold.'

The USA’s approach has already started influencing the world, potentially leading to rapid adoption. If this proposal unfolds in Hong Kong, it could set a precedent for other regions and countries, encouraging them to consider Bitcoin as a viable financial reserve.

Such a move would further legitimise Bitcoin and could significantly boost its global standing and acceptance. In April this year, Hong Kong’s Securities and Futures Commission (SFC) approved spot Bitcoin and Ethereum ETFs for trading earlier this year, demonstrating their belief and desire to lead the advancement in cryptocurrency development.

USA Pension Funds to Add Bitcoin

This week, Michigan State and Jersey City pension funds joined Wisconsin in allocating a portion of their portfolios to Bitcoin. Wisconsin's investment, announced in Q1, brought the cumulative total between Michigan and Wisconsin to $162.6 million. Additionally, Jersey City has allocated 2% of its overall portfolio to Bitcoin.

This growing trend among pension funds seeking exposure to Bitcoin highlights a significant shift in institutional adoption, facilitated by ETFs. This trend is extremely bullish for the future, as US pension funds collectively hold approximately $35 trillion. If just 2% of this amount were allocated to Bitcoin, it would translate to a staggering $700 billion investment.

Solana Beats Ethereum

Solana surpasses Ethereum in total weekly gas fees for the first time, hitting this major milestone reflects its growing network activity and adoption.

With Solana generating nearly $25 million in revenue compared to Ethereum’s $21 million, this shift highlights Solana’s increasing competitiveness and efficiency. The achievement underscores Solana’s ability to handle high transaction volumes with lower fees, enhancing its appeal as a viable alternative to Ethereum and potentially reshaping market dynamics.

Over the past year, Solana has significantly outperformed Ethereum, showcasing an edge in the competitive landscape of blockchain networks. This remarkable performance can be largely attributed to Solana's thriving meme coin ecosystem and a surge in developer interest. SOL has outperformed with an impressive 78.4% increase in value, compared to Ethereum's 45.1% rise.

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