BITCOIN - BLACKROCK JUST DID IT! (THIS JUST HAPPENED!)

My Financial Friend

Introduction to Recent Bitcoin Developments

  • A significant development involving BlackRock has occurred, which is crucial for Bitcoin.
  • A new academic paper proves that Bitcoin is a powerful tool for states to protect themselves from monetary devaluation.
  • The dollar has lost 25% of its purchasing power since 2018.

Microstrategy and Taxation on Unrealized Gains

  • Microstrategy may have to pay federal income taxes on its unrealized Bitcoin gains of $18 billion, according to some reports.
  • This is considered unlikely as taxing unrealized gains is unprecedented and could lead to significant economic complications.

Ohio's Strategic Bitcoin Reserve

  • A new bill has been introduced in Ohio to create a strategic Bitcoin Reserve, allowing the state to allocate up to 10% of its general fund into Bitcoin.
  • The bill ensures robust custody solutions and is tech-neutral, using the term "digital asset" to reduce political friction.

BlackRock's Bitcoin ETF

  • BlackRock has filed for in-kind redemptions for its Bitcoin ETF, allowing large investors to send in Bitcoin and receive shares of the ETF, and vice versa.
  • This development is expected to unlock more liquidity and provide better hedging options for investors.

Fidelity's Cash Back Program

  • Fidelity offers a program that provides unlimited 2% cash back, which can be deposited into a Fidelity account.
  • This program can be used to passively accumulate Bitcoin by investing the cash back into Bitcoin ETFs or other Bitcoin-related assets.

Scenario for Accumulating Bitcoin

  • A scenario is presented where an individual with an average income in the US invests $14,000 per year, with half of it going into Bitcoin.
  • Using a credit card with 2% cash back, the individual can accumulate approximately 0.27 Bitcoin over 20 years, which could be worth around $3.5 million in a bullish scenario.

Conclusion

  • The developments in the Bitcoin space, including BlackRock's ETF and Fidelity's cash back program, are expected to have a positive impact on the market.
  • Accumulating Bitcoin through passive means, such as cash back programs, can be a viable strategy for long-term investors.