BlackRock eyes 2% BTC allocation

You degenerate keep getting liquidated!

This Week in Crypto

Bitcoin looks poised to close the week green, despite the largest amount of liquidations in a day since 2021 ($1.6B), we also had the highest daily close ever at $101,202.

Mid-9-figure ETF flows are now the norm around these parts, so nothing to write home about there…

Blackrock Investment Institution recommended a 2% allocation for investors into Bitcoin this week. To put this in perspective, Blackrock alone has around $11T AUM, a 2% allocation here would be $220B. You can extrapolate that to all wealth management AUM in the US ($50T) and then all global wealth ($450T). That is Bitcoin’s TAM.

• This comes as the ETFs reach the milestone mark of $35B net inflows to gather 1.14M BTC (c.5.4% of all BTC ever).

• $100K is still cheap!

Ethereum flows also continue to impress. On a market-cap basis, they have been proportionally larger than the Bitcoin inflows this month.

President Elect Trump was also buying coins on chain this week through World Liberty Fi, he purchased $10M cumulatively of ETH, LINK and AAVE. That was not on my bingo card at the start of the year.

A few things to note on the Saylor/Public market front:

• The madman bought more, obviously…

• $MSTR is likely to now also be added to the QQQ index, benefitting from passive flows.

• Sadly but not surprisingly, MSFT shareholders shot down the proposal to follow the Saylor strategy to buy Bitcoin. You can only lead a horse to water…

• $RIOT becomes the latest minor to plan to issue convertible notes to buy Bitcoin ($500M worth).

Following googles release of Willow, it’s state of the art quantum chip, Bitcoiner’s began thinking about the implications for cryptography.

• TLDR, in theory, quantum computing could allow algorithms to break cryptographic systems. For instance, the derivation of private keys from public keys could be possible and allow for double spending.

• However, this is not an immediate risk, but in the long run (our lifetimes), Bitcoin and other blockchain protocols will likely have to implement quantum resistant features.

A few other pieces of noteworthy news:

• Texas files bill to establish a strategic Bitcoin reserve, around 9 other states have proposed something similar.

• This is not just an American phenomenon, other countries such as Brazil are starting to cotton on too.

• El Salvador appears to have bent the knee to the IMF, agreeing to change their Bitcoin law in exchange for $3.3B of loans. Merchants will no longer be required to accept Bitcoin.

And finally, a shameless plug, but we just launched Bitcoin and Crypto credit lines. Check it out!

This Week in TradFi

A bit of a mixed bag on the domestic front, with some surprising numbers coming out this week:

• U.S. weekly jobless claims unexpectedly rose last week, with unemployment claims last week hitting 242,000, 20,000 more than expected.

• Consumer prices increased last month by the most we’ve seen in seven months. Progress in lowering inflation has also slowed, with the Labor Department reporting virtually no change in inflation over the last four months.

• In more positive news, mortgage rates fell to the lowest level in nearly two months, which could lead to an increase in home sales if the trend continues. The rate hit 6.6% this week, marking a third straight week of decline. 

• On the same note, rent is rising at the slowest pace in almost 3½ years.

• And what you care about most - traders continue to expect another rate cut next week, and the market reflects that belief. The S&P 500 and Nasdaq rose Wednesday, with the Nasdaq reaching over 20,000 points for the first time.

On the international front:

• Rate cuts everywhere! Canada slashed rates by 50bps on Wednesday, followed by central banks in the euro zone and Switzerland cutting rates yesterday. 

• On the other hand, Brazil’s central bank raised interest rates by 100bps on Wednesday, more than expected. The bank indicated they would continue to raise interest rates, potentially bringing the borrowing rate up to 14.25% by March, an eight-year high. 

• Reports indicate that the Bank of Japan plans to keep rates steady next week. 

• Bad news out of Britain - the UK’s economy shrank for a second month in October, the first back-to-back declines since 2020. The GDP dropped 0.1% MoM in both October and September. 

• German exports also fell in October by 2.8%, lower than the expected 2% decrease. Exports to the U.S. specifically were down 14.2% compared to September. 

This Week in Tech

OpenAI launched its video generating tool Sora on Monday. 

• Sora marks a departure from ChatGPT, with the tool available through an entirely separate website. 

• Sora is able to generate videos both from uploaded images and prompts, and users can see what prompts were used to create other videos available on the website. 

• However, currently, most users are not allowed to upload photos or footage of real people as a reference. OpenAI reports that this capability will eventually be available to all users, but they first need to test their “approach to safety” given the clear potential for abuse. 

• The model also has a “Re-mix” feature, which allows users to describe changes they’d like to see to a video. The feature incorporates a strength setting, which gives users control over the magnitude of change Sora implements to a video. 

On Tuesday Amazon launched Amazon Autos, which allows customers to find, order, and buy new cars, trucks, and SUVs from dealerships. 

• The service is currently only available in 48 U.S. cities, including New York, LA, and Chicago.

• The partnership is beginning with Hyundai, though Amazon says more auto manufacturers (and cities) will become available in 2025. 

• Customers will also be able to get financing and e-sign paperwork directly through the Amazon Autos site. Amazon Autos apparently can also handle trade-ins.

• This marks a departure from many other online car sales companies like Carvana and Carmax, which sell used vehicles. Currently, Amazon Autos is only for new cars. 

• Amazon reports that in addition to new car manufacturers and cities, Amazon Autos will also offer leasing and other financing options next year. 

As usual, below are some fundraising announcements, M&A, and tech personnel changes that caught our eye:

• Robotics company Anybotics has raised an additional $60M for its Series B, rounding off at a total of $110M.

• Archer Aviation, which is building vertical take-off and landing aircraft, has raised another $430M in equity from investors such as Stellantis and United. 

• Lumen Orbit, a startup aimed at building data centers in space, closed an $11M seed round at a $40M valuation. 

Gen Digital is acquiring fintech company MoneyLion in a $1B deal at $82/share.

Arch is building a next-gen wealth management platform for individuals holding Alternative Assets. Our flagship product is the crypto-backed loan, which allows you to securely and affordably borrow against your crypto. We also offer access to bank-grade custody, trading and staking services, powered by BitGo.

Disclaimer: None of the above is financial advice, seriously.