The perfect storm continues.
I told everyone this was going to happen: Fed will pivot right before spot ETF approval. Pretty wild to see it actually happen. In a recent speech Powell heavily implied that easier money will be on the way. Already many are harping on inflation and how it's about to get much worse, but that's not actually how inflation works, so yeah.
The Fed printed a ton of reserves during COVID 2020. Did inflation occur in 2020? No, inflation is happening now. It takes years for these things to happen, so no need to jump the gun just yet. This all happens to be in line with Bitcoin's 4-year cycle (imagine that). The next bull market very well may be one of the biggest we've ever seen. If it is everyone will be harping on the 'S-curve' and potentially even the 'super cycle', but again don't listen to that nonsense. Most people have no idea what they're talking about and just live in a reactionary reality.
Once again we are getting front-row seats to just how fast government can move when it's being properly motivated. Google is now allowing crypto trusts to advertise on the platform. What a random 'coincidence'. The SEC keeps having multiple unprecedented meetings with spot applicants. Powell gives a dovish speech.
And now this.
As we can see this is something that Michael Saylor has been discussing for a while. It's simply not fair that corporations can't acquire and report on their Bitcoin holdings as they would do with other assets. Now all of that is changing all within the same pocket of ETF approval. Again, what a 'coincidence'.
The 'fair value' rule that's being implemented is a very important one for big institutions with share holders.
The rules are set to go into effect on December 15, 2024, but companies will be able to apply them earlier than that.
Under the new guidelines, which are the first of their kind in the United States...
Ya don't say?
What interesting timing.
Previously, the old treatment accounted for Bitcoin as an intangible asset, which meant if the price went lower than what companies bought it for, they had to take an impairment charge on their books, even if they didn't sell. But if the price went up, they couldn't receive any benefit on their books unless they sold.
Tangible asset confirmed
So now any company can buy Bitcoin and declare massive gains when the price goes up. Without selling; unrealized gains. The entire business models of some of these companies could fully rely on number going up in as little as 5 years. I mean hell, Microstrategy already pretty much does this; they were first to the party, and I think we all have to admit that move is going to pay off big. The only hurdle is not getting bankrupted by the first bull market, which MSTR has already accomplished. Clear skies after that moment in time.
Zombie corporations
It's not all sunshine and rainbows. This actually might get so bad that Bitcoin keeps failed companies afloat that should have otherwise gone bankrupt. Wouldn't that be something? Imagine being subsidized by your own investments and nothing else. Better than being subsidized by the government, but still potentially toxic.
Remember Block.One? Some will recall that they were and still are the centralized company behind the EOS blockchain. What did they do with their billion dollars worth of ICO seed money? Well they were SUPPOSED to use it to fund development on the EOS blockchain, but instead they just sold the ETH into BTC and sat on it like greedy little goblins.
If I'm being honest it's hard to blame them. What are the odds someone could invest that money back into their own business and get a bigger return than what Bitcoin has to offer? Considering most business models operate on thin profit margins it will basically be impossible for many businesses to scale up while actually outpacing the rise of Bitcoin price that they lost by selling.
The only way around something like this is to time the market correctly through buying low and selling high during the 4-year cycle. Seems like it should be easy but it never is. However, if enough market participants actually achieved this feat it would greatly reduce Bitcoin (and all of crypto's) volatility. Lower highs and higher lows is a good thing. The best outcome is a slow and steady line that goes up (say +2%-5% per month). Will we actually achieve such a thing. Ah well I very much doubt it considering the limitless greed within a PvP market, but I guess it's possible.
Conclusion
Everything is happening all at once, and the market continues to be in disbelief. The only thing that's going to force the vast majority of this sidelined money into crypto is a concrete statement from the SEC that at least one spot ETF will be approved. Until then everyone seems to be playing the speculation game on extremely low volume.
Honestly though at this point I think we have to agree that the writing is on the wall. There are simply too many 'coincidences' stacking up for the ETF to be delayed past March. Unlike some people, I'm quite confident in the market's ability to frontrun the market and push the price up x2-x3 from here within days of approval. Infinite greed is infinite.
At this point I'm certain that if the ETF does get approved we will be trading above all time highs within hours, while if it gets delayed I expect a V-shaped panic dip. The risk:reward ratio of this market is shockingly favorable even at a $42k price point. I may have to start loading up my credit card with debt all over again to avoid selling during this crazy time.
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