Bitcoin exposure is becoming more accessible on public markets, with several companies in the Bitcoin space set to go public. Large corporations continue updating their positions on Bitcoin, which are primarily positive. Biden continues pushing for a large infrastructure bill and a large increase in discretionary spending.
Bitcoin Gains Relevance in Public Markets
Coinbase released its financial statements ahead of its direct listing. The report included nearly $800 million in net income on revenue of $1.8 billion. The company now puts its verified user count at 56 million. A source from Kraken reported that the exchange may also consider a direct listing in 2022, as a result of record volumes. Grayscale Bitcoin Trust(GBTC) announced plans to convert its trust into an ETF, provided it can secure regulatory approval. The move comes after GBTC’s longtime premium rapidly eroded into a discount. Bitcoin’s Lightning Network now has over 10,000 nodes; double the amount from this time last year. SEC commissioner Hester Peirce stated that the government is no longer able to shut down the Bitcoin network, because in order to achieve such a goal “you’d have to shut down the internet.”
Institutions Continue Taking Stances on Bitcoin
HSBC has banned the buying of MicroStrategy shares, due to the company’s outsized Bitcoin position. This sentiment is in sharp contrast with positions taken by other major financial institutions. State Street has announced plans to build bank-grade infrastructure to facilitate the trading and transfer of digital assets. NYDIG raised $100 million from traditionally conservative investors, including Liberty Mutual Insurance and MassMutual, as part of a bitcoin-powered insurance strategy. The Sacramento Kings are now offering all players and coaches the option to receive any portion of their salary in Bitcoin. Caruso, one of the largest private real estate companies in the United States, announced that tenants can now pay their rent in Bitcoin and that the firm had allocated 1% of its treasury to the currency.
Biden Pushes For Additional Spending
Peter Thiel voiced concerns that China could use Bitcoin as a “financial weapon” against the US; he claims Bitcoin could help undermine the dollar’s role as a global reserve currency. Meanwhile China has launched a digital version of the Yuan, which will be much easier to control and track than the physical version of the currency. The Biden administration is continuing to push an infrastructure spending plan, which is now worth $2.3 trillion. The plan will largely be funded by increases to the corporate tax rate and excise taxes. Biden also released a preliminary plan to increase discretionary spending to a total of $1.52 trillion, an 8.4% increase. New York state announced that it will be raising taxes on corporations and high earning individuals, including a top marginal tax rate of 10.9% on the highest earning single filers.
Bitcoin exposure is continuing to gain relevance in public markets. Between new companies going public and existing companies entering the Bitcoin space, it seems as though most large investors are on track to have a stake in the currency. The current administration continues to push for spending, despite the ongoing record levels of national spending and debt.