Big Wall Street Players Have Entered The Game
To investors,
Wall Street is under assault from technologists. The bitcoin and crypto industry is coming fast and furious. They are unrelenting and there seems to be a new announcement every day.
For example, a new public company called Twenty One was announced yesterday. It will start with around $4 billion of bitcoin on its balance sheet and is backed by SoftBank, Tether, and Cantor Fitzgerald. Bitcoiner Jack Mallers will serve as CEO and Brandon Lutnick of Cantor was heavily involved in orchestrating the whole thing.
Twenty One aims to be a capital efficient competitor to Strategy, which now owns more than 500,000 bitcoin on its balance sheet. This challenger has no operating business. It is pure exposure to bitcoin with a stated goal of increasing the bitcoin per share. If successful, the new company will prove once again that Wall Street is addicted to volatility, regardless of where it comes from.
The traditional finance industry is not going to stop at bitcoin. Sol Strategies announced yesterday a $500 million credit facility so they can buy more Solana. That SOL will be staked and the staking rewards will be used to pay back the interest on the loan. This is a novel structure that gives lenders unique exposure to the altcoin market.
And think about the size of these announcements. They are hundreds of millions, or billions, of dollars in deals. Wall Street doesn’t play small and crypto has grown up enough for serious players to participate.
I will continue to reiterate an important point — Wall Street is addicted to volatility. Crypto has more volatility than any other industry. And now people in bitcoin and crypto are providing a variety of vehicles and structures for Wall Street to play in this new game.
But the new entrants will not be limited to only traditional Wall Street firms. Coinbase confirmed on national television yesterday that sovereign wealth funds have been buying bitcoin in the last few weeks. This announcement would have been front page headlines a few years ago, but it seemed like no one cared yesterday.
Wild to see how far we have come.
I share all of this because I see too many people talking online about tariffs or other short-term economic events. None of this is going to matter in the long-run. Bitcoin is an idea whose time has come. Ask yourself “will bitcoin care about the Trump presidency 15-20 years from now?” The answer is probably not. Not because of the administration, but more so because bitcoin is apolitical. And I say that as someone who has been pleasantly surprised that the administration followed through with their campaign promise of establishing a strategic bitcoin reserve.
I see bitcoin as a black hole for capital. It continues to suck liquidity into its market cap. Private markets. Public markets. Equity capital. Debt capital. Whatever the market can come up with, bitcoin will be there to receive the capital.
Some buy bitcoin because they want to speculate on future price appreciation, while others store their economic value in bitcoin as they run away from a concerning fiat system that continues to devalue their wealth. Regardless of the reason, the big players are at the table, they are going as big as they can, and bitcoin is just getting warmed up.
It is really hard not to be bullish right now. Hopefully that bullish perspective will start showing in a higher price through the rest of the year.
Have a great day and I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
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Did The Bitcoin ETF End The 4-Year Cycle?
Hunter Horsley is the Founder & CEO of Bitwise Asset Management. Matt Hougan is the CIO of Bitwise Asset Management. This conversation was recorded at Bitcoin Investor Week in New York.
In this conversation we talk about bitcoin, what has changed since ETFs have been approved, why is buying the ETFs, Bitwise, private wealth, sovereign wealth funds, and is the 4-year bitcoin cycle over?
Enjoy!
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Big moves
nice 👍