Ledn’s Weekly Hodl: Super Bowl Send

Week of Monday February 6th

Start earning up to 10% APY on your crypto with a Ledn Growth Account. 

Bitcoin Market Analysis

After soaring north of $40K in early December, Bitcoin has been consolidating for 8 weeks around the $44,000 level. 

In terms of market dynamics, we’ve seen strong inflows to the new Bitcoin ETFs, but those positive flows have been largely neutralized by almost equal outflows from the Grayscale Bitcoin Trust. This graph from @thomas_fahrer is a great visual representation of what’s been happening:

However, analysts expect the GBTC outflows to eventually subside, and the spot Bitcoin ETFs should become net positive aggregators of Bitcoin.

In terms of what’s next, there is no shortage of near-term catalysts for Bitcoin. One of the main ones we’ll be diving into today is the marketing engine behind the ETFs, which has not yet started running– and will do so in very short order.  Other Bitcoin-specific catalysts are the Halving, and a plethora of flavours around Bitcoin ETFs that we should see later this year.

In terms of technical price levels that we’re monitoring, we’re watching:

Resistance 2: $52,000

Resistance 1: $48,000

Support 1: $37,500

Support 2: $32,000

Our Essay:  Super Bowl Send

Spot Bitcoin ETFs are off to a blockbuster start. More than $6 Billion have flowed into the 3 largest funds (Blackrock, Fidelity, Bitwise), with a similar outflow from the Grayscale Bitcoin Trust. The net inflows for all funds has been ~$1.45 Billion to-date.

With the top 2 funds adding more than $5 Billion in AUM during their first month of operation, the launch has been a screaming success for issuers and end-users.

Winner Takes All

The battle to crown the king of Spot Bitcoin ETFs is a matter of survival. To exemplify this, let’s look at Gold ETFs - which have been around for almost 20 years now:

A few things to note from the chart above. 

As you can see - even with gold, which as an asset is 10X the size of Bitcoin, the liquidity will concentrate around 1 or 2 “winners” - with the rest of issuers literally fighting “for scraps”. 

What this means, is that many of the spot bitcoin issuers that we see today will likely not be around in a few years time. It’s win or go home (eventually). 

Because of this dynamic, issuers are pulling out all of the stops in the early days to gain as much market share as possible. 

A Battle Royale To Crown the King

The first round of the Battle Royale was a race to the bottom in management fees. All issuers cut fees aggressively and announced incentives into the launch.

Now, the battle is moving to the arena of public awareness - better known as marketing.

One thing that has been absent from ETF issuers has been a big marketing push for their products. However, the signs that they are getting ready to spend are everywhere:

First - the TV ads. Many have teased TV ads,  like Bitwise with “The Most Interesting Man in the World”, Galaxy with Mike Novogratz, ArkInvest/VanEck with their “text-based” ads - and even Blackrock with its very sobering ad. The TV ads have been produced and teased online, but not a lot of “spend” has been put behind them. 

The second sign is the change in Google Ads’ policies to allow “cryptocurrency coin trusts” to advertise - this happened last week.

And issuers didn’t take long to light up their Google Ads - as per this morning’s piece from the Financial Times.

Both of the above lead me to believe that one or more issuer is getting ready for a big awareness campaign. 

Naturally, when you want to make a big splash, you need to invest in production (creating the ad), distribution (showing the ad), and conversions (capturing the interest from the ad and turning it into a client). And all of these issuers, with massive budgets, are fighting for mind share as we approach the largest sporting event in the U.S. this weekend - the Super Bowl.

Because of the above, I believe that one or more issuers is going to drop a TV ad about their Bitcoin ETF during the Super Bowl this weekend. 

Super Bowl Send

The Super Bowl is going down this Sunday in Las Vegas. The Kansas City Chiefs are taking on the San Francisco 49ers for the NFL title in front of an estimated audience of over 100 million people. 

While some outlets like CNN are already predicting that Crypto and AI will be missing from this year’s Super Bowl ad roster…

I’m taking the opposite side, and believe that there will be a Bitcoin ETF ad this Sunday. If this happens, it would make Bitcoin the biggest winner coming out of this year’s Super Bowl.

Am I the only person who believes a Super Bowl Bitcoin ad could be coming? No, not at all.

Here’s why if a Bitcoin TV ad were to air, it would be a game-changer:

The Super Bowl typically ranks as the most watched event in the U.S.. It was so last year, with over 112 million viewers tuning in. This year, the viewership is also expected to surpass 100 million viewers. 

For any company looking to build awareness for their product in the U.S., there is no second best.

However, there’s something that makes this year’s super bowl even bigger. And that’s Taylor Swift!

In case you’ve been living under a rock, Taylor Swift, the world’s most popular pop star, is dating Travis Kelche - who plays as starting Tight End for the Kansas City Chiefs. 

Ms. Swift plans to be in attendance - planning to take a private jet from Japan to make it to the game. 

To highlight why this is such a big deal… Taylor Swift’s Twitter following of more than 95 million followers is almost as big as the projected viewership of the event itself - and the overlap between the audiences is nearly zero. 

She is quite literally a “multiplier” effect for awareness.

With an entire generation watching, drawing both males and females, this year’s Super Bowl can be an awareness bomb for marketers - and I believe bitcoin will be among the winners.

2. Bitcoin’s Relative Performance

If you look around at where certain asset classes are performing as we head into Super Bowl, Bitcoin starts looking really compelling on a relative basis:

U.S. Equities are at all-time highs, at soaring valuations. With nearly all of its recent gains driven by 7 companies (out of 500)…

The Chinese stock market is collapsing…

Real estate? Interest rates are astronomical, and so are prices. Affordability is at historic lows. 

Bonds? Jerome Powell all but said that rates are going down in the next 6 months in his 60 minutes interview this weekend. That means bonds will be forcefully priced lower as rates drop.

Bitcoin looks really good on a relative basis.

3. Easy Access

While most Americans don’t have an account at a crypto exchange, the majority of American households owns stock - meaning, they likely have a brokerage account.

This means that if a Bitcoin ETF ad airs during the Super Bowl, and it resonates with people, the potential for conversion from “viewer” to “hodler” will be easier than it has ever been. All Americans would have to do is log into their brokerage accounts and buy an ETF unit.

No need to set up a new account. No decision fatigue or distraction from thousands of other tokens. No need to learn about self-custody. 

Closing Thoughts

Even if there is no spot bitcoin ETF TV ad during this Super Bowl– you can expect issuers to ramp up their marketing budgets in very short order. 

Given what’s at stake, the size and scale of the issuers’ marketing budget, and the cultural relevance of this weekend’s Super Bowl, I do believe there’s a high likelihood that we will see a Bitcoin ETF TV ad this Sunday.

If this happens, I believe that Bitcoin’s awareness (and price) could soar in the days and weeks that follow.

HODL.

Notice for Canadian Residents: As of August 3, 2023, any Canadian BTC or USDC Savings Account is transitioned into a new non-interest earning BTC or USDC Transaction Account for the purposes of allowing Canadian clients to manage their Ledn loans.

Notice for U.S. Residents: As of August 3, 2023, any U.S. BTC or USDC Savings Account is transitioned into a new non-interest earning BTC or USDC Transaction Account. On that date, the account balance in any U.S. Legacy Savings Accounts will remain in such accounts and continue to be non-interest earning. 

This article is intended for general information, educational and discussion purposes only, it is not an offer, inducement or solicitation of any kind, and is not to be relied upon as constituting legal, financial, investment, tax or other professional advice. This article is not directed to, and the information contained herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution, publication, availability or use would be contrary to law or regulation or prohibited by any reason whatsoever or that would subject Ledn and/or its affiliates to any registration or licensing requirement. This article is expressly not for distribution or dissemination in, and no Ledn product or service is being marketed or offered to residents of, the European Union, the United Kingdom, the United States of America or any jurisdiction in Canada, and such product or service may only be marketed or offered in such jurisdictions pursuant to applicable laws or reliance on regulatory exemptions. A professional advisor should be consulted regarding your specific situation. Digital assets are highly volatile and risky, are not legal tender, and are not backed by the government. The information contained in this publication has been obtained from sources that we believe to be reliable, however we do not represent or warrant that such information is accurate or complete. Past performance and forecasts are not a reliable indicator of future performance. Any opinions or estimates expressed herein are subject to change without notice. This article may contain views or opinions of the author that do not necessarily reflect the opinions, standards or policies of Ledn. We expressly disclaim all liability and all warranties of accuracy, completeness, merchantability or fitness for a particular purpose with respect to this article/communication. Read our Disclaimers at https://ledn.io/legal/disclaimers