Bitcoin Breaks $10,000 & A 10-ton Gorilla Enters The Room

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Investors,

Do you feel the excitement in the air? Last week I wrote about stocks only going up. Well now, it might be bitcoins time to shine. The king is rising!

Just this morning, Raoul Pal tweeted:

Well, Raoul, we got our wish. Just minutes later we surpassed $10,500 and are hovering around $10,800 as of 10:30 am PST.

Price isn’t the only indicator of bitcoins success though. According to a Glassnode report:

“Bitcoin on-chain fundamentals have seen an increase during Week 30. GNI (Glassnode Indicators) gained 8 points, taking it up to a total of 70. The rise was mostly driven by a large increase in the Sentiment subindex, with smaller gains in Liquidity also contributing.”

I would highly recommend signing up for their On-Chain Data and Intelligence Platform.

Bitcoin’s hash rate is up, active addresses are up, the difficulty is up, transactional fees are down, and the price is pumping! It is a great start to the week.

Last week was a big week as well but one news headline seemed to fly under the radar.

A report by coindesk.com highlighted:

“The Office of the Comptroller of the Currency (OCC) is letting all nationally chartered banks in the U.S. provide custody services for cryptocurrencies. In a public letter dated July 22, Senior Deputy Comptroller and Senior Counsel Jonathan Gould wrote that any national bank can hold onto the unique cryptographic keys for a cryptocurrency wallet, clearing the way for national banks to hold digital assets for their clients. 

The letter marks a major development for the crypto industry. Previously, custody was the province of specialist firms, such as Coinbase, which typically needed a state license, such as a trust charter, to offer the service to large investors. Now, large, regulated financial companies that already provide similar safekeeping services for stock certificates and the like could enter the fray.”

Oh boy was Gandhi right. First, they ignore you, then laugh at you, then fight you, then you win. It seems decades of work are happening in weeks right now. The world is in unrecognizable chaos yet Bitcoin does what it was always programmed to do - ignoring the noise and continuing to make block after block as traditional finance scrambles to catch up.

They are going to catch up though. Once they do, it won’t be a man in a suit walking in through the door, it will be a 10-ton gorilla smashing its way in. The gorilla won’t back down to anyone and will do what it wants to do and what it has always done.

I listened to an excellent podcast this morning between Caitlin Long, the Founder and CEO of Avanti Financial Group, and Anthony Pompliano. Caitlin spent 22 years on Wall Street, including Morgan Stanley, where she was Head of Corporate Strategies and Pension Solutions.

In their conversation, Caitlin had several notable points about the OCC letter:

“It's a big deal. It’s a bigger deal then most folks in the crypto industry understand.”

This changes everything.

National banks can now custody digital assets.

Every US bank can now custody crypto. National and state banks are no different. They both have the same master account at the federal reserve, so every single bank can start bringing crypto into their business.

You need a bank license to be competitive.

Fidelity Digital wants to be the sub-custodian and looks to be ahead of the learning curve on this compared to crypto-only companies.

President Trump told Libra to get a bank license.

Notably, It takes 9-12 months to get a bank license.

The regular users are really in control of Bitcoin.

The big guys are used to fractional reserve banking, not transparent ledgers, and scarce supply (there is a lot of risk for them).

There is a legal risk in crypto. Wyoming is the only state with basic commercial law clarifications related to digital assets.

The vast majority of digital assets are held by individuals - this is not legally enforceable in the case of transactions.

This is complicated stuff.

Bakkt was delayed for years before launch.

Skill sets and cultural values are way different between crypto and big banks

Banks might need to buy native-crypto companies or vice versa.

Consumers and VCs are the biggest winners.

Institutions are going to trade with banks with more respectable terms and conditions.

A shift in the political party in November won’t affect bitcoin much.

In each party, some will hate crypto and some will accept it.

This OCC letter is going to stick.

Bitcoin is going to get financialized.

Bitcoins’ price went down with future markets/Bakkt launching.

There will be more liquidity but it could suppress the price.

Wall Street will be doing the same tricks because their systems are designed that way.

At the end of the day, the users control bitcoin.

These are just my biggest take-aways from the conversation. If you want the full interview, watch it here:

The 10-ton gorilla is coming. It is going to be exciting to watch everything unfold! If the gorilla wants to suppress the price, you know I’ll be buying more.

Have a great week!

-molesy

As a reminder, this is not financial advice. Do your own research.

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