Crypto is a Flight to Quality


Crypto is a Flight to Quality

December 12, 2023

In August, Grayscale won their court case against the SEC. The case wasn’t about approving GBTC to become a spot bitcoin ETF, but the excuse used for denying it. The SEC claimed the spot bitcoin price can be manipulated, therefore they won’t approve a spot ETF. If that's the case, then why did the SEC approve bitcoin futures ETFs?

This is what the court case was about and the court ruled in favor of Grayscale. In so many words, the court said it’s ridiculous to approve the futures ETF but not the spot ETF. If price manipulation were a concern, then neither ETFs should be approved. And so far, there have been no problems with the bitcoin futures ETFs in regards to price manipulation.

The SEC had until October 30th to appeal the decision. However, on October 13th, they preemptively said they won't appeal. This brought us one step closer to a spot bitcoin ETF being approved and the sector rejoiced.

Everyone is Excited About a Spot Bitcoin ETF

On October 16th, a tweet went out by Cointelegraph saying “BREAKING: SEC APPROVES ISHARES BITCOIN SPOT ETF.” Within minutes the bitcoin price shot up 10%. However, it proved to be fake news, bitcoin gave back the quick gains, and Cointelegraph had some explaining to do. Apparently it was due to an overzealous employee not checking their sources, nor following company protocols on posting.

This prompted Larry Fink to jump on Fox Business News to address the tweet.

Well, I can’t talk about the specifics of anything, I think it’s just an example of the pent-up interest in crypto and we’re hearing from clients around the world about the need for crypto. 

I mean, when you think about… I think some of this rally is way beyond the rumor. I think the rally today is about a flight to quality, with all the issues around the Israeli war now, global terrorism, and I think there’s more people running into a flight to quality, whether that is in treasuries, gold or crypto, depending on how you think about it. And I believe crypto will play that type of role, as a flight to quality.

Larry Fink, BlackRock CEO

Wow. The CEO of the world's largest asset manager just said there’s a need for crypto and that it's a flight to quality. Even I wouldn’t go as far as comparing crypto to treasuries just yet. I think we still have a ways to go before crypto can be considered a safe haven, but I do believe that is the end game. Regardless, Larry has a new product to sell and he’s going to pump it.

The market is already pumped for it too. If the fake news above wasn’t enough, only 7 days later there was another fake news event.

On October 23rd, the internet got worked up by discovering BlackRock’s ticker symbol and CUSIP number. Everyone seeing that assumed an ETF approval was imminent, and again, the bitcoin price shot up 16% within a day. Turns out the ticker symbol and CUSIP had been in place since August. However, this price rally stuck.

Bitcoin broke above the $32,000 level of resistance and hasn’t looked back. The price is $41,271 as I type.

It goes to show a spot bitcoin ETF is not priced into the market. Yet, everyone is watching and waiting for it to launch. This is why I believe a spot bitcoin ETF will be the main driver of the next bull market. And just like Michael Saylor was one of the talking heads of the 2021 bull market, Larry Fink is poised to be one of the talking heads in the next bull market.

​​2024 Bull Market

Depending on how you look at it, we’re already in a crypto bull market. Bitcoin is up 163% since the lows in November 2022 and the rest of the crypto market is up 64%, albeit on a more choppy path than bitcoin. Still, the November lows have held. I believe they will prove to be the bottom and that we’ve been climbing the wall of worry of a new bull market. 

I’m expecting to see a full blown crypto bull market in 2024.

Even Google is getting ready for it. They just updated their advertising policy to include “cryptocurrency coin trusts” (i.e.) spot bitcoin ETF.

In January 2024, Google will update the Cryptocurrencies and related products policy to clarify the scope and requirements for the advertisement of Cryptocurrency Coin Trusts.

Beginning January 29th, 2024, advertisers offering Cryptocurrency Coin Trust targeting the United States may advertise those products and services when they meet the following requirements and are certified by Google.

Examples (non-exhaustive): financial products that allow investors to trade shares in trusts holding large pools of digital currency.

Updates to Cryptocurrencies and related products policy (December 2023)

Remember, all the financial companies applying for a spot bitcoin ETF have over $25 trillion in assets. If only 1% of that money moves into a bitcoin ETF that equates to $250 billion of buying pressure on bitcoin.

Despite the recent strength in bitcoin, its market cap is only $804 billion. $250 billion of buying pressure could easily push bitcoin over $100,000 and take the rest of the crypto market up with it.

THORChain is a Quality Crypto

I know what you want. You like the upside potential in bitcoin, but you want some leverage to it. Bitcoin could go up 300% from here, but you want a token that could go up 3,000%. However, you don’t want to throw your money into just anything, you want a quality investment.

THORChain (RUNE) is one of the best quality cryptocurrencies out there. Don’t take my word for it, the results speak for themselves. THORChain has been one of the best performing cryptocurrencies over the last few months on many different time frames.

Top 50 Tokens - CoinMarketCap

THORChain is the first decentralized exchange (DEX) that can swap bitcoin. In August, a new feature was launched called Streaming Swaps that made THORChain the cheapest place in the world to swap bitcoin. Once word got out, volume on the DEX exploded higher. Over a weekend in November, THORChain handled 2% of the world's spot bitcoin volume. And we’re just getting started.

THORChain Volume

The increase in volume increases revenue on the platform, which increases the RUNE price. The price performance of RUNE over the last couple months has been driven by fundamentals, not hype. As long as the volume holds up, so too should the price. December is already on track to set a new monthly volume record.

THORChain is poised to become larger than Coinbase and Binance and this is where the opportunity lies. But you have to get in now before that happens.

Youxia Crypto RUNE Fund

As of November, the Youxia Crypto RUNE Fund is up 492% since inception! $100,000 invested is now worth $592,000!

The easy money has been made, but it’s not too late. This is just the beginning. RUNE is around $6 right now and I believe it could go to $100 (go through links below to see why).

Bitcoin has been up for 8 straight weeks now. This hasn’t happened since the beginning of the 2017 bull market. The 2017 bull market also had several 30% pullbacks despite the epic year. Pullbacks are good and enable the market to consolidate and form a base to launch higher from.

A 30% pullback from the recent high in bitcoin could take the price down to ~$31,000. There’s lots of support at that price on the chart too. If so, that would be a great time to back up the truck to get positioned for the next bull market.

Should we see weakness in bitcoin over the coming weeks, that could bring the RUNE price down, providing you a great entry point into the fund. It takes a couple of weeks to get you approved into the fund, so act sooner rather than later.

The fund buys the RUNE token for capital gains potential and uses the token to run nodes and collect yield.

Running nodes is where it gets fun. The nodes secure the exchange and, in return, they collect revenue from the swapping fees. The exchange will grow proportionally with the revenue from the fees. Therefore, the yield should prove to be as good as the capital gain.

$1 invested today could yield $1/year and eventually $1/month. All while sitting on a large capital gain.

The plan is to compound the yield for the first few years and wait for the token price to go up, then start paying the yield out to you as income. Ideally, the fund will last for decades. There’s no reason to wind it up if we can collect passive income for years to come.

You can invest with fiat, crypto, or a mix of fiat and crypto.

Let me know if you want to get access to the offering documents.

To learn more about THORChain and why you should like it, review these links:

Fund Pitch Deck

Read - THORChain (RUNE) Investors Guide

Video - THORChain (RUNE) Introduction - Explained for Beginners

Thank you for reading.

I’m the founder of Youxia Crypto, an asset management company specializing in crypto. I can help you buy and sell precious metals too. I believe crypto is more than just about trying to make money, it’s about creating freedom for oneself and the rest of the world. I’m a contrarian, voluntaryist, and proponent of Austrian Economics. I enjoy downhill skiing, scuba diving, live music, yoga, and traveling.

Kenton Ralph Toews business card with contact info

The intended use of this material is for informational purposes only and is not intended to be an offer or solicitation for the sale of any financial product or service or a recommendation or determination that any investment strategy is suitable for a specific investor. Investors should seek financial advice regarding the suitability of any investment strategy based on the objectives of the investor, financial situation, investment horizon, and their particular needs. This information is not intended to provide financial, tax, legal, accounting or other professional advice since such advice always requires consideration of individual circumstances. The investments discussed herein are not insured by the FDIC or any other governmental agency, are subject to risks, including a total loss of the principal amount invested. Past performance is no guarantee of future returns.

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