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Block 1: Essential news
Trump buys himself a burger in BTC
Donald Trump paid for a burger in bitcoins at a New York restaurant. It was a way of showing his unwavering support for the ecosystem in the run-up to the presidential election, and also, in turn, illustrating the rise of cryptocurrencies as an everyday means of payment. Thanks to the Lightning Network, Bitcoin's second-layer solution, this transaction was quick and inexpensive. Trump, publicly a fan of cryptos, had expressed his infatuation in July 2024 at The Bitcoin Conference, where he even floated the idea of setting up a national reserve in BTC to alleviate the US debt. This week, he announced the launch of a cryptocurrency platform with his sons and friends: World Liberty Financial.
A Revolut stablecoin coming soon?
Revolut, the British neobank, is reportedly in the advanced stages of launching its own stablecoin, according to several sources cited by CoinDesk. This project aims to strengthen its cryptocurrency offering for its 45 million customers, including over 3 million in France. Revolut, already active in the crypto sector, aims to democratize access to these assets with a dedicated trading platform. The issuance of this stablecoin is part of an effort to comply with European MiCA regulations.
MicroStrategy: more and more bitcoins
MicroStrategy has announced a new $700 million bond issue to buy bitcoin (BTC). This is the third time this year that the company has raised funds to increase its bitcoin reserve, which already stands at 244,800 units. The funds will first be used to repay an existing $500 million debt, and the remainder will be used to buy more BTC. The bonds, aimed at institutional investors, will be convertible into shares and mature in September 2028. This move will free up 69,000 BTC used as collateral.
Bhutan & Bitcoin
Bhutan holds $750 million in Bitcoin, or around 24% of its GDP. This reserve has been accumulated through Bitcoin mining, rather than judicial seizures, as is the case for other countries. Bhutan uses its renewable energy resources to make mining profitable, exploiting its 30,000 MW energy potential. This choice places the country among the world leaders in terms of Bitcoin reserves relative to GDP. Bhutan is following a similar strategy to El Salvador, which is also using Bitcoin to boost its economy.
Block 2: Crypto Analysis of the week
Bitcoin, once relegated to the bangs of the financial system, could well become investors' secret weapon against currency devaluation, sovereign debt accumulation and geopolitical uncertainties. At least, that's what asset management giant BlackRock asserts in its latest report, published on September 17, 2024 . The message is clear: Bitcoin is unlike any other asset, and its place in investors' portfolios could soon become unavoidable.
The report, entitled "Bitcoin: a unique diversifier", written by Robert Mitchnick, Samara Cohen and Russell Brownback, presents Bitcoin as an unrivalled diversification tool. At once a global, rare, non-sovereign and decentralized asset, bitcoin is now seen by some as a safe haven in times of crisis. The report explains that these qualities are particularly attractive in a context of economic and political tensions, where the escalation of the US national debt and the devaluation of traditional currencies are of growing concern to investors.
Larry Fink, CEO of BlackRock, has already expressed his support for Bitcoin, calling it a legitimate tool for protecting against inflation and fiscal drift. Since the launch of BlackRock's Bitcoin Spot ETF, the company's tone has become even stronger. The report highlights three features that make bitcoin particularly attractive: a fixed quantity, unique transportability and open access to the network. According to the report, it is these elements that enable bitcoin to stand out in the face of current challenges to the global monetary system, such as currency devaluation and limited financial inclusion.
The report does not fail to mention bitcoin's exceptional performance. Since its inception, its price has risen spectacularly, outperforming other traditional asset classes in seven of the last ten years. However, it should be noted that BTC has also gone through periods of significant decline, sometimes reaching falls of over 50%.
The authors do not deny that bitcoin remains a risky asset. Its adoption as a global payment and store-of-value asset is still in its infancy, and price fluctuations and regulatory challenges persist. Yet BlackRock points out that cryptocurrency, as an asset uncorrelated with traditional markets, could play a crucial role in portfolio diversification. Its low correlation with the S&P 500 stock index (0.2 vs. 0.1 for gold) reinforces this idea, proving that Bitcoin is largely independent of the macroeconomic variables affecting conventional assets.
As a reminder, asset class correlation can be represented by a range of numbers from -1 to 1. With a correlation of 1, the assets under consideration move in synchrony, and with a value of -1 in the completely opposite direction. If the value is 0, there is total independence in price movements.
In times of crisis, bitcoin also seems to act differently from traditional risk assets. The report points out that, although the crypto-asset sometimes reacts negatively initially to events such as the coronavirus pandemic or the regional banking crisis of 2023, it has shown an ability to bounce back quickly.
Finally, BlackRock believes that bitcoin could become an increasingly valuable diversification tool, particularly in the face of global fiscal and geopolitical challenges. BTC, with its lack of counterparty risk and independence from traditional financial systems, could even benefit from future crises, according to the authors. However, the company warns against over-allocation, as greater exposure could increase a portfolio's overall risk.
However, this flattering analysis cannot be detached from the fact that BlackRock recently launched its own Bitcoin Spot ETF, and there seems to be a parallel between the praise heaped on the asset and the firm's commercial interest. Bitcoin is described as a solution to modern economic ills, and this perspective seems, in many ways, to justify the existence and promotion of BlackRock's Bitcoin ETF. Clearly, the firm is not only analyzing the asset for its clients: it is also seeking to legitimize its new investment product with the general public.
Admittedly, BlackRock's analyses of Bitcoin's intrinsic qualities are relevant and well-documented. But it's hard not to see this report as a boost for the ETF, especially at a time when regulators are scrutinizing the cryptocurrency industry and competition in the Bitcoin Spot ETF offering is intensifying.
Block 3: Tops & Flops
Crypto chart(Click to enlarge)
Block 4: Readings of the week
Barron Trump takes the stage (Wired)
People set themselves on fire and get their faces punched to inflate their cryptocurrencies (Wired, in English)
The Trump sons really love crypto (The Atlantic)
Bitcoin Fractal: A deceptive affinity (Bitcoin Magazine)
