July Week 5 - 2024

CRYPTO RESET
Trump's Bitcoin Keynote: A Glimpse Into America's Crypto Future

Former President Trump delivered a keynote speech at Bitcoin Nashville 2024 this past weekend, marking a historic moment for the cryptocurrency community. His address resonated with many attendees, touching on key points that the Bitcoin community had eagerly anticipated, though it lacked substantial details.

Trump promised to fire Gary Gensler and appoint a new SEC chairman supportive of innovation. He declared that America would become a "Bitcoin mining powerhouse" and urged supporters to hold onto their Bitcoin. However, on the critical topic of a strategic national crypto stockpile, Trump fell short of committing to transferring the 210K Bitcoin held by the Justice Department to the Treasury Department.

In contrast, Robert Kennedy Jr., also running for president, delivered a more detailed and substantive speech the night before. He pledged to leverage Bitcoin as a strategic national asset, stating his plan to direct the Treasury to purchase 550 Bitcoin per day and transfer approximately 200,000 Bitcoin to the U.S. Treasury.

Despite the lack of specifics in Trump's speech, the mere presence of a former president and current presidential candidate making significant promises regarding Bitcoin is remarkable. The event highlights the increasing importance of Bitcoin in national discussions.

As Trump’s speech veered off script into familiar rhetoric, some supporters were left wanting a more heartfelt and reflective address. Yet, the fact remains that Bitcoin is being discussed at the highest levels of politics.

Just three years ago, even the most optimistic Bitcoin advocates wouldn't have imagined that the U.S. holding Bitcoin in reserve would be a real consideration. This surreal moment underscores the rapid evolution and growing acceptance of Bitcoin in mainstream politics. The discussions and proposed legislation reflect a significant shift, reminding us to appreciate the progress made in bringing Bitcoin into the forefront of national policy.

MUSIC RESET
Spotify's Profits Soar as Artists Face Financial Hardship

The recent announcement of Spotify's first profitable year has left many in the music community in disbelief and outrage. While the streaming giant celebrates its financial success, the reality for many artists, songwriters, and publishers remains starkly different.

Spotify co-founder Martin Lorentzon recently cashed out $85.8 million in stock following the company’s record profits. This follows an earlier transaction in June where Lorentzon sold shares worth $81 million, bringing his total to $166.8 million in just two months. Other top Spotify executives have followed suit, collectively selling tens of millions of dollars in shares. Meanwhile, Spotify’s market cap has soared to approximately $65.2 billion, surpassing even Universal Music Group.

Yet, this financial windfall for Spotify’s executives comes at a time when the company is reducing its mechanical royalty payments to songwriters and publishers by approximately $150 million annually. The decision to reclassify its Premium tiers as ‘bundles’ to include audiobooks has sparked significant controversy and legal challenges. The Mechanical Licensing Collective (MLC) has filed a lawsuit against Spotify for underpaying royalties, a case the streaming service is vigorously defending.

This situation highlights the glaring disparity between the wealth generated by Spotify and the earnings of the artists whose work fuels the platform. The company’s executives continue to amass personal fortunes, while many musicians struggle to make ends meet. The $150 million royalty cut is particularly galling for a community already feeling the financial strain of the streaming model.

Spotify’s profitability should not overshadow the fact that the creators behind the music are being shortchanged. The irony is palpable: a company that positions itself as a champion for artists’ livelihoods is now celebrated for its financial success while those very artists face dwindling incomes.

The music community's frustration is understandable. The expectation for fair compensation is not unreasonable. As Spotify revels in its profitability, it is crucial to remember the artists and creators whose talents are the foundation of the platform's success. Without addressing these inequities, the celebration of Spotify's financial milestones will remain bittersweet at best.

ANOTHER CRYPTO RESET
BlackRock Bitcoin ETF Surpasses QQQ in Year-to-Date Inflows: A Staggering Milestone

In an astonishing turn of events, BlackRock's iShares Bitcoin Trust (IBIT) has surpassed the Invesco QQQ Trust Series 1 (QQQ) in year-to-date net inflows, marking a significant shift in investor interest towards cryptocurrency. This development underscores the rapidly evolving landscape of financial markets, where digital assets are gaining traction at an unprecedented pace.

As of mid-2024, IBIT has attracted $18.97 billion in year-to-date inflows, narrowly surpassing QQQ’s $18.90 billion. This achievement is particularly remarkable given the disparity in total assets between the two ETFs. IBIT, with total assets of $21.97 billion, is dwarfed by QQQ’s $287.22 billion, highlighting the extraordinary level of demand for Bitcoin exposure through regulated ETF products.

The Invesco QQQ Trust, known for tracking the Nasdaq-100 Index, includes the 100 largest non-financial companies listed on the Nasdaq stock exchange. Despite this prestigious standing, the QQQ has been outpaced by the relatively new IBIT, which focuses on Bitcoin, signaling a paradigm shift in investor preferences.

IBIT now ranks fourth in terms of ETF inflows for the year, with Fidelity’s spot Bitcoin ETF (FBTC) also making a significant impact, ranking eighth. The rapid accumulation of assets in IBIT reflects a growing appetite among investors for digital assets within traditional financial frameworks.

The scale of IBIT’s inflows relative to its asset size is unprecedented, indicating a strong and sustained interest in Bitcoin as an asset class. This trend is a clear sign that we are moving towards a new financial era much faster than previously imagined.

The financial world is taking note of these developments, and the implications are profound. Just a few years ago, the idea of Bitcoin ETFs competing with major stock index funds would have seemed far-fetched. Today, it is a reality, demonstrating the transformative potential of digital assets in mainstream finance.

As we witness this historic shift, it is clear that the integration of cryptocurrency into traditional investment portfolios is accelerating. The success of IBIT and other Bitcoin ETFs is a testament to the growing acceptance and legitimacy of digital currencies. This milestone serves as a wake-up call to investors and financial institutions alike, signaling that the future of finance is being redefined right before our eyes.

DISCLAIMER:
This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions or investments. Please be careful and do your own research.