Why Bitcoin Is Surging & Who Is Buying

I'm excited to announce the launch of our weekly newsletter, designed to keep you informed about the fast-moving crypto market. This complements our existing monthly deep-dive newsletter, which will continue to provide big picture insights and analysis.

Executive Summary

• New All-Time-High For Bitcoin: Bitcoin surges to new all-time high of $95,101 USD (A$145,932)
• National Bitcoin Adoption: The US, Poland, the state of Pennsylvania and corporate adoption of Bitcoin as a strategic reserve asset is driving increased demand of a fixed supply asset
• Alt Coins Surge: Alternative cryptocurrencies showing strong momentum as 'alt season' begins with 40% November surge in market cap

New All-Time High For Bitcoin

The price of bitcoin reached its new all-time-high on Wednesday 20th November on the back of MicroStrategy purchasing 51,780 bitcoin for ~$4.6B. The company uses a combination of debt and equity to buy more bitcoin, driving the price of the asset higher on its balance sheet, allowing it issue more debt and equity to repeat the cycle. In addition, NASDAQs options market started trading the largest bitcoin ETF, Blackrock's (IBIT). In its first day of trading, $1.9B of options contracts were traded. ~80% being of those contracts were call options (providing investors the option to buy at a future point in time), bullish for price.

National Bitcoin Adoption

This week we also saw the state of Pennsylvania introduce a bill to allocate up to 10% of state funds (~$50B) into bitcoin, representing a potential investment of $5B. Bear in mind, this is just one state in the US.

A bill has also been put forward by Senator Cynthia Lummis, proposing for the US Government to acquire 1 million bitcoin over the next 5 years. Whether this passes remains to be seen.

Around the world, Polish presidential candidate Sławomir Mentzen also recently announced that if elected, he would ensure Poland has a strategic bitcoin reserve.

Alt Coins Surge

Alt-season is well underway with the total non-bitcoin market cap of crypto increasing by 40% to over $811B since the beginning of the month. This is typically timed following a period of bitcoin dominance, investors speculate on crypto memes and tokens that offer false promises. Aside from the memes, however, there is a sense of promise for alternative tokens which are still in the early phases of adoption. Tokens such as SUI have surged over 89% in November and have major backers and funding from VCs like A16z where they raised over $300m for their shot at tokenising the gaming market.

Final Thoughts

Bitcoin is becoming a strategic priority for governments, states, pension funds, companies and individuals that are looking for a scarce store of value that provides capital preservation amidst ongoing monetary inflation and geopolitical uncertainty. Whilst prices may come down from these all time highs, a risk to consider is also not having an allocation or being underallocated to this asset class.