Blockchain Bites: MicroStrategy’s Macro Strategy for Bitcoin Treasuries

Three stories

1. Mining companies benefit from the market rally. California’s $ 441 billion pension fund has increased its stake in Bitcoin miner Riot Blockchain (RIOT) nearly sevenfold, while Ethereum miners generate record earnings.

  • The California Public Employees Retirement System (CalPERS), the largest public pension in the United States, held 113,034 RIOT shares valued at over $ 1.9 million as of late Tuesday, 2020. This has been the case since the third quarter of 2020 when CalPERS ‘16,907 shares of RIOT were worth a comparatively tiny value of $ 49,000.
  • Publicly traded bitcoin mining company Argo Blockchain bought 172.5 BTC in January on rising revenues. The new bitcoin stash is currently valued at over $ 6 million.
  • Ethereum miners earned a record $ 830 million in January as network activity, fees, and the price of ether rose. Almost 40% of all mining revenues came from network fees.

2. Industry experts see two bullish signs for crypto. First, Dai (DAI) and USD Coin (USDC) balances on exchanges have hit lifetime highs, according to Glassnode. Meanwhile, Guggenheim research sets $ 600,000 as the price target for Bitcoin.

  • Increasing stablecoin balances could anticipate massive purchases into the crypto ecosystem. “New flows [to crypto markets] come from more mainstream institutions participating [that] have a strong predisposition to transparent, trustworthy, regulated dollar stablecoins, ”Circle’s Jeremy Allaire told CoinDesk’s Muyao Shen.
  • While a six-figure price might be a long way off, Scott Minerd, Guggenheim’s chief investment officer, reversed his earlier bearish comments, saying that if Bitcoin follows the golden path, it will attract large sums of institutional money.
  • For example, Ruffer Investment Management invested 2.5% of its $ 27 billion portfolio in Bitcoin in November and recently announced that it had made a profit of $ 750 million on the deal after taking roughly half of its stakes in a market had sold for around $ 40,000.

3. Trad meets Crypto: Visa is partnering with crypto bank Anchorage to enable traditional bank customers to buy and sell digital assets such as bitcoin. This will be done through a number of APIs (Application Programming Interfaces) that banks can tie into the crypto ecosystem and play there.

  • “This moves into the next phase of Visa ‘s strategy, where we explore how Visa can also act as a bridge between thousands of financial institutions … helping them tap into the growing world of crypto assets and blockchain networks “Visa Crypto Lead Cuy Sheffield told CoinDesk’s Nate DiCamillo.
  • Independently of this, the investment firm Accelerate Financial Technologies has filed a preliminary prospectus for a new Bitcoin Exchange Traded Fund (ETF) with the Canadian securities authorities.

On the game

The macro strategy
According to the latest information from the data company Glassnode, more than 15% of the total Bitcoin in circulation has been moved to “accumulation addresses”. This number is often quoted to show how the owners hold up over the long term.

At a 3.5 year high, around 80,000 BTC were moved to these addresses. According to CoinDesk market reporter Omkar Godbole, Accumulation Addresses is an industry term for wallets with at least two non-trivial inbound transactions that have never been paid for.

This latest milestone comes as Bitcoin continues to leave the exchange. As CoinDesk has already reported, coin inflows on exchanges usually indicate an impending sell-off.

“Bitcoin’s continued lockdown has created a liquidity squeeze on the sales side, led by increased institutional buyers, and has supported the recent uptrend,” wrote Godbole.

Indeed, large players in the market are amassing bitcoin. In December, Grayscale increased its assets under management by 72,950 BTC, far surpassing the 28,112 BTC mined over the same period. (Grayscale and CoinDesk are 100% owned by the Digital Currency Group.)

In the meantime, MicroStrategy, an intelligence company that made a name for itself in 2020 for going all-in on Bitcoin, has continued to expand its Bitcoin treasury. The publicly traded company now holds a total of 71,079 BTC, valued at over $ 2.9 billion, according to Bitcoin Treasuries.

The company’s CEO, Michael Saylor, has become an industry attorney, arguing that companies should invest their cash holdings in the hard cap cryptocurrency. As you know, he called Fiat a “melting ice cube”.

Today MicroStrategy is hosting a conference where Saylor wants to educate its cohorts on the value of Bitcoin investing. Saylor said he plans to go through his “game book”, including accounting and legal advice. Danny Nelson from CoinDesk will cover the event.

“In the first week of February, thousands of corporate executives, officers, directors and consultants will all be gathering to see how Bitcoin can be included on their balance sheet, their PnL,” Saylor told CNBC. Power Lunch ”in January.

“This conference could further increase interest in Bitcoin, and even if it doesn’t lead to immediate price increases, it will definitely have a positive long-term effect,” said Joe DiPasquale, executive director of San Francisco-based bitcoin and cryptocurrency hedge fund BitBull Capital said Forbes.

Indeed, if Saylor’s pitch succeeds, the industry could see a number of new entrants from institutional funds. Scott Minerd, Guggenheim’s Chief Investment Officer, predicted this future.

As others have pointed out, Bitcoin is fast approaching a moment when coins will no longer be minted (estimated in 2140). Jameson Lopp, CTO of Casa, put it this way: “The final bitcoin will be minted gradually over a period of 40 years.”

Fast bites

  • INK? Proposed rules to limit cryptocurrency in India are still under discussion, with the written rules left for interpretation. (CoinDesk)
  • LUXURY ACCOMMODATION: The blockchain startup SUKU will switch its high-end sneaker authentication system to Hedera Hashgraph and cite unbearable fees for Ethereum. (CoinDesk)
  • OPSEC UPSET: A Navy couple used their military connections to steal and resell civilians’ personal identification information for Bitcoin. (CoinDesk)
  • “UNISWAP FOR NFTs”: Rarible raised $ 1.75 to build a DAO. (CoinDesk)
  • NOT BLOCKED: Crypto personality Mike Dudas joins Paxos as the stablecoin lead. (CoinDesk)
  • HASHMASKS CRAZE: 16,000 NFTs were sold for $ 9 million. (Decrypt)
  • DEFI mortgage: An engineer has repaid his bank loan and refinanced it with notional finance. (The defiant)
  • BIDEN’S BACKER: The Intelligencer introduced Sam Bankman-Fried from FTX. (New York)

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