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October 14, 2020 | Issue #139

 MUST READS 

Another Publicly Traded Company Buys Up BTC


Big news in the world of Bitcoin: Payments company Square (SQ) revealed their recent purchase of $50M worth (1% of their balance sheet) of BTC.

Square joins MicroStrategy (MSTR) as the second publicly traded company to announce they are holding Bitcoin on their balance sheet. This announcement is arguably a much bigger deal than the last one considering Square is a thriving $83B fintech darling.

The best part about Square's announcement is the way in which they disclosed their allocation: an open-source white paper that details their reasoning, their execution of the purchase, how they are securing and insuring their BTC, and how they are accounting for the BTC on their balance sheet. This opens up the playbook for other publicly traded companies that may be interested in following suit.
 

Another One... And A Note On "Free Float"


Thought we were done? Not quite.

This week, another corporation announced it has added Bitcoin to it's balance sheet. This time, we have Stone Ridge Holdings Group claiming that it holds more than $100mm in Bitcoin as a "primary treasury reserve asset."

If you aren't aware by now, the ongoing mad dash for BTC is a massive narrative. This has compelled us to take a closer look at Bitcoin's diminishing "free float" and what it means for the price.

Let's start by taking a look at some (round) numbers:

There have been ~18.51M Bitcoins mined to date. Approximately 1.8M have been "lost" according to Coinmetrics. Another 40-50% of the float is held by "whales" such as Satoshi's 1.1M.

All of this is to say that there are only approximately 8.3-9.9M Bitcoins in the free float.

Ok, but what's the point of going through this exercise? It means that every time we hear about another corporation adding Bitcoin to it's treasury, it is that much more significant.

For example, looking at the data from Bitcointreasuries.org, we see that they are estimating that 2.87% of BTC is owned by public companies. But looking at it from the perspective of the "free float", it actually looks to be much more like 6-7%.

And with MSTR's and SQ's announcements inspiring more and more companies every day, we see this trend only accelerating.

The float will continue to squeeze and... well, we will let you make your own conclusion of what happens then.

h/t @hkuppy
 

Market Snapshot

Shout out to Paul Tudor Jones for predicting that Bitcoin will be the "fastest horse" in today's economic environment.

Here's how BTC has performed YTD in comparison to other macro asset classes, courtesy of @Messari.

  • BTC: +60%
  • Silver: +35%
  • Gold: +25%
  • S&P 500: +9%
  • Dow Jones: +/-0%
  • Crude Oil: -34%

For future reference and bragging rights to your friends at home, check out the BTC vs. Traditional Asset Chart here.

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 DEEP DIVE 

Ethereum As The Basis For The Evolution Of The City State


Today, many speculate about whether the U.S. will cede place to China as the global superpower.

But what if this is the wrong way to look at the question? What if we’re living through a more radical transition? What if all contemporary states are in the process of being replaced by a new kind of “state,” as different from existing governments as they themselves differed from ancient empires or primitive tribes?

Peek and ponder into a possible future here.
 

The Multiple Personal Token Future


In this deep dive, Chris Robison, introduces us to "The Multiple Personal Token Future" and explains how meTokens fit into the bigger picture.
 

Crypto Market Structure 3.0


Some of us are well aware that the crypto market is opaque and poorly understood due to global fragmentation, rapid change, and the diversity of participants.

This essay provides a useful starting point for those of us trying to catch up. It breaks down two significant evolutions in the crypto market over the last decade, and articulates what crypto infrastructure could look like in the next few years.
 

PwC Releases a New Study Regarding Blockchain Technology's Global Impact


In their latest report, PricewaterhouseCoopers (PwC) identified the top five uses of blockchain, ranked by their potential to generate economic value:
  1. Provenance
  2. Payments and Financial Instruments
  3. Identity
  4. Contracts and Dispute Resolution
  5. Customer Engagement
Other Key Highlights:
  • The report concludes that blockchain could boost the global economy by $1.7 trillion within the next decade
     
  • 61% of CEOs put digital transformation in their top three priorities
     
  • PwC economists expect China and the U.S. to benefit the most from blockchain technology over the next decade
     
  • They expect between 10% and 15% of worldwide infrastructure to be using blockchain within a decade

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 REGULATORY FRONT 

Regulatory Clean-Up Moves Are Good for Crypto, Fundstrat Says


A slew of regulatory moves announced this week is positive for the famously free-market-oriented cryptocurrency space, according to Fundstrat Global Advisors LLC.
 

 TWEET OF THE WEEK 

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