Welcome to our #186 weekly newsletter.
“For women taking control of their financial future”
-Jana Hlistova
From The Purse
In this week’s newsletter, we focus on BlackRock’s filing for a spot bitcoin ETF in the US. It has been 10 years since the first filing for a spot bitcoin ETF.
However, investors are weighing up the latest development in the crypto industry’s battle with the SEC (U.S. Securities and Exchange Commission) regarding regulation and guidance.
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And you can review the news in brief so you stay on top of global financial, economic and investing trends.
I hope you enjoy this week’s newsletter.
Until next week,
Jana
BlackRock files for a spot bitcoin ETF
The filing with the SEC comes 10 years after the first filing for a spot bitcoin ETF.
BlackRock, the world's biggest asset manager, on Thursday filed for a spot bitcoin exchange-traded fund (ETF) in the US, as reported by Reuters.
BlackRock's iShares Bitcoin Trust will use Coinbase Custody as its custodian, according to a filing with the U.S. Securities and Exchange Commission (SEC).
Crypto prices climbed a day after the announcement. But investors are weighing the latest development in the crypto industry’s battle with the SEC (U.S. Securities and Exchange Commission) regarding regulation and guidance.
If this ETF is approved, it is likely to open the floodgates to institutional investors adding bitcoin to their investment portfolios.
One of the purposes of bitcoin is diversification, as it is regarded as an ‘alternative investment’. It also has a different risk profile compared to traditional financial markets. So whilst this investment carries more risk, there is disproportionate upside for investors.
Referred to as ‘digital gold’…
…bitcoin is the largest cryptocurrency in the world, currently trading at $26,500 with a global cryptocurrency market capitalisation at around $1.10 trillion.
This year bitcoin has rallied 80% higher than previous year levels. However, the road to recovery is long, as bitcoin is still down almost 50%, from its all-time high which crossed $69,000, in November 2021.
Bitcoin is a decentralised and permissionless (blockchain) technology and global monetary network which can not be controlled by any one party, government or central bank.
The SEC also recently confirmed the cryptocurrency as a commodity (not a security).
Unlike fiat money, bitcoin has a limited supply of 21m coins. It is impossible for more bitcoin to be ‘printed’ once all the supply is available.
Therefore unlike fiat money, bitcoin is deflationary, not inflationary. As an investor, the money you allocate to bitcoin, over a longer term horizon, should go up in value.
The price predictions for bitcoin vary from $250,000 to $1m++ by 2030.
Despite its volatility, bitcoin is increasingly regarded as ‘sound money’ and a store of value by retail investors and institutions alike.
The iShares Bitcoin Trust would become the first approved ETF…
…in the U.S. to track the price of bitcoin. It has been 10 years since the first filing for a spot bitcoin ETF (and every application has been rejected).
BlackRock’s filing comes a week after the SEC sued Coinbase, its crypto custody partner, for violating securities laws.
It is believed that BlackRock’s commitment to Coinbase is almost as important as its commitment to bitcoin in the long term.
What next?
Read the Bitcoin White Paper
Read The Bitcoin Standard
Check out crypto exchanges including Coinbase and Kraken.
Disclaimer: I invest in BTC, ETH, and other altcoins. Please do your own research. This article is for informational purposes only, we do not provide investment advice.
News in Brief
Financial news
US Federal Reserve opts not to raise interest rates after more than a year of increases as widely expected, but signals the break may be temporary. Fed's new '23 dot implies two more 25bp hikes this year.
ECB's Christine Lagarde says ECB is 'very likely' to raise rates in July. The markets are pricing in a 114% probability of a July increase.
ECB: Inflation projected to remain too high for too long. Increases inflation forecast for each of the next three years by 0.1ppt. Sees 2023 inflation now at 5.4%, 2024 at 3%, and 2025 inflation at 2.2%.
ECB raises all rates by 25bps as expected. Depo Rate to 3.50%, highest since 2001. Main Refi to 4%, highest since 2008.
UK GDP expanded by 0.2% in April, driven by the services sector as consumer-focused companies such as pubs and bars saw more business.
Expectations that UK interest rates will keep climbing to fight inflation have lifted sterling to $1.269 against the dollar, the highest level since April 2022.
Bank of America (BoA) Fund Manager Survey shows the lowest cash level (5.1%) since Jan'22 BUT asset allocator conviction confined to tech & IG bonds. Allocation to stocks at 5 month lows; so risk asset "pain trade" still up.
Apple closes at record in latest sign of Big Tech’s dominance. The stock rose 1.6% to $183.79, bringing its year-to-date gain to 41%. This is Apple’s first closing high since January 2022. Stock nears a $3tn valuation following 2023’s surge.
Crypto: bitcoin, ethereum, DeFi & NFTs
Cryptocurrencies climb to end the week as investors digest BlackRock’s bitcoin ETF plans. Bitcoin is trading higher at $26,500+, while ether is up at $1,700+.
Elon Musk denies owning Dogecoin stash linked to insider trading. Musk’s lawyer says the claim that the Tesla CEO is secretly a DOGE whale is “without basis.”
Shiba Inu (SHIB), Bitcoin (BTC), Ethereum (ETH) and other cryptocurrencies supported by BitPay are accepted as payments for merchandise of the British professional basketball club, the London Lions.
Read more on U.Today https://u.today/shib-btc-eth-accepted-by-this-british-professional-basketball-club-details
BlackRock, which manages $9.5 trillion in assets, rocked the crypto world when it applied to the U.S. Securities and Exchange Commission for a Bitcoin exchange-traded fund (ETF). Though the product is technically a trust, it’s functionally the same as an ETF, experts say. But this comes at a strange time, as the SEC has ‘cracked down’ on crypto recently.
Coinbase slams 'evasive response' from SEC to court order. The SEC was told to respond to a Coinbase petition, but its response was noncommittal.
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The Purse provides content for informational purposes only, we do not provide investment advice. Please do your own research or speak to a financial adviser.
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