Happy Friday, everyone!

On Thursday morning (Australian Eastern Standard Time), this was the mood at Crypto Down Under HQ:

The reason?

The US Securities and Exchange Commission (SEC) approved 11 Bitcoin ETF applications! 🚀 

This is a huge step for Bitcoin, which I've explained here and here.

In a nutshell: In just 15 years since its inception, Bitcoin has grown from a fringe internet phenomenon to a mainstream asset class. From now on, retail and institutional investors can buy an ETF if they want exposure to Bitcoin. An ETF is like a stamp of approval from the traditional financial world, making it much easier to buy Bitcoin.

This is how BlackRock US, the world's largest fund manager and one of the companies that applied for a Bitcoin ETF, advertises the product on its website:

But in case you missed it, this week has been hectic. So let me give you a quick recap.

A quick recap of this week’s shenanigans

On Tuesday, shortly after 4 pm (US Eastern Standard Time), the SEC posted a message on X (formerly Twitter) saying that it had approved the Bitcoin ETF.

The market immediately went into a frenzy. The price of Bitcoin jumped from around US$46,600 to nearly US$48,000 in less than two minutes.

But then Gary Gensler, the chairman of the SEC, posted this message:

The market had a bit of a moment.

Gensler's tweet was followed by a quick sell-off within minutes to a level lower than before the announcement.

Some people on X speculated that Gensler was trying to cover up the fact that someone at the SEC had screwed up and jumped the gun.

But then X weighed in:

It turned out that an unidentified person had indeed gained control of a phone number associated with the SEC.

And the SEC hadn't been using two-factor authentication (2FA). That's bad optics for a regulator whose job it is to educate people about how to use 2FA to protect their accounts from cyberattacks.

Even worse, the SEC has been holding up the Bitcoin ETF approval for years because of concerns about market manipulation. But the day before a widely expected approval, the organization is compromised and someone manipulates the market using the SEC's account. 😵‍💫 

So the SEC, the watchdog against market manipulation, may be in trouble for manipulating the market and may have to investigate itself.

Good luck with your investigation, Gary! 🤞 

Some thoughts on the price

In terms of price, now that the Bitcoin ETFs are finally approved, it could mean that a big rally is ahead.

We saw some selling on the day of the approval, but Bloomberg is predicting US$4 billion in inflows when the ETFs start trading on Thursday (US Eastern Standard Time).

In the medium term, Standard Chartered Bank expects Bitcoin ETFs to attract inflows of US$50-100 billion by the end of the year. As a result, the price of Bitcoin could rise to US$200,000 by the end of 2025, according to the bank.

Whether this prediction is accurate or not, with the approval of Bitcoin ETFs and the next halving coming up in April, some good times seem to be ahead. ⛵️

In addition, the approval of the Bitcoin ETF in the US has set a precedent for other jurisdictions.

In Australia, the Financial Review reported on Wednesday (Australian Eastern Standard Time) that the Australian Securities Exchange (ASX) will also approve Bitcoin ETFs in the first half of the year and that Brisbane-based asset manager Monochrome will be the first in line to get the green light.

So it's only a matter of time before local Bitcoin ETF products will be available in Australia. 🤜🤛

Some thoughts on Bitcoin in the US

Even though the SEC's approval of Bitcoin ETFs puts Bitcoin at the center of the traditional financial system, it is important to keep in mind that the US political elite is still very much against Bitcoin.

For the past decade, asset managers in the US have been trying to get a Bitcoin ETF across the finish line. However, the SEC has rejected all of their applications.

This week's approval comes after a court ruling. Grayscale, one of the asset managers whose application had been denied, filed a lawsuit against the SEC. The court ruled that the SEC's reasoning for denying the Bitcoin ETF application was "arbitrary and capricious".

In other words, this time the SEC was forced by a court to approve the Bitcoin ETF applications. The judicial system was the driving force behind the Bitcoin ETF.

SEC chairman Gary Gensler was even bitchy when he released a statement on the approval of Bitcoin ETFs on Wednesday (US Eastern Standard Time):

So, in his approval statement, Gensler says, put simply: I pretend to be neutral, but Bitcoin is 💩 and it's used for illegal activities.

Even though that’s factually incorrect and could be said about any asset class, I expect this argument to stick around the US political elite for a while. It will be used by Gensler, JP Morgan Chase CEO Jamie Dimon (maybe because he has political ambitions), Senator Elizabeth Warren, and others.

In my opinion, this argument is the "Iraq has weapons of mass destruction" argument of the financial world.

In case you don't remember, US Secretary of State Colin Powell gave a PowerPoint presentation to the United Nations Security Council in February 2003 in which he stated that the reason for the US invasion of Iraq was that the country had weapons of mass destruction. In March 2003, the US invaded Iraq. But the alleged weapons of mass destruction were never found. 🤷 

The political elite will repeat ad nauseam that Bitcoin is primarily used for illegal activities, even though that's factually wrong. They know that some muppet in the media will always parrot their talking points. (Just like they did before the US invaded Iraq.) The Australian Financial Review ran this opinion piece on Wednesday (Australian Eastern Standard Time), concluding that "the primary use of cryptocurrencies - beyond trading - is for hacking, theft and money laundering." 🤮

The US political elite is still very much against Bitcoin because it's a threat to the hegemony of the US dollar.

The US dollar's status as the world's reserve currency and the petrodollar system that settles oil sales in US dollars create a constant demand for US dollars around the world. This demand allows the US to borrow money more easily and to impose painful financial sanctions on other countries.

Bitcoin - more than any other fiat currency - is the closest thing to a competitor for a global reserve currency because it's decentralized, apolitical, and in limited supply.

For now, the Bitcoin ETF is the best result we could hope for. And don’t get me wrong, it’s amazing! 🍾 

But the war against Bitcoin isn’t over yet.

Before you go, please help me get better! 🙏 

Feel free to drop me an email or dm me on Instagram, LinkedIn, or Twitter with any feedback or topics you'd like to see covered in this newsletter!

Thank you! 🤜 🤛