📝 An (unusual) short-term trade

GM everyone. This is 2036 - with a fresh look 🌱.

Here’s what we’re serving up today 🍲: you can bet on the Bitcoin ETF approval by owning bitcoin or GBTC. But what if you wanted to add a little spice to it?

Let’s dig in.

One of the most discussed themes in the crypto community has been Bitcoin's strength relative to Ethereum.

Year-to-date, Bitcoin is up ∼2X more than Ether.

Most of this can be attributed to 3 things:

1/ Bitcoin’s increasing role as digital gold 🧈.

Yesterday, Larry Fink called bitcoin’s rally the “flight to quality.”

And during the collapse of Silicon Valley Bank, bitcoin gained +50% in 3 weeks.

The world is waking up to bitcoin as a hedge against uncertainty and chaos in the traditional financial system.

2/ The 4-year crypto cycle 🌀.

Every bull market in crypto starts with a bitcoin rally.

Ethereum follows suit. And by the time altcoins are to the moon, the rally is close to over.

Once again, bitcoin is the first mover in this new cycle that started in November 2022.

3/ The upcoming bitcoin ETF narrative 🏦

The first Bitcoin ETF in the US will likely get approved in the next ∼85 days.

Investors are betting this will lead to billions - or trillions - of $$ of inflows into bitcoin.

That’s why Bitcoin’s dominance (relative to other coins) has been on a tear since the beginning of the year.

It’s possible this trend continues until the Bitcoin ETF gets approved.

And if you wanted to bet on it - you could:

• Own BTC and GBTC

• Own tokens of protocols that directly benefit from bitcoin’s dominance

Enter Stacks.

Stacks is a Layer 2 that brings DeFi, smart contracts and decentralized applications (dapps) to the Bitcoin blockchain.

It’s trying to make Bitcoin cheaper, faster, and more scalable - just like Layer 2s have done for Ethereum.

If Layer 2s take off on bitcoin like they did on Ethereum, Stacks native token - STX - should benefit because users and developers will need STX to execute the smart contracts.

That means its success is directly tied to how much people use and build on Bitcoin.

Its upcoming Nakamoto Upgrade release will bring the speed of transactions secured by the bitcoin network down to ∼5 seconds.

Not bad at all.

But even if that doesn’t happen, in the short term, Stacks could still benefit from the bullish Bitcoin narrative if it keeps going.

This is like buying Lido (LDO) going into the Ethereum merge: a great use case enabled by a technological upgrade (proof-of-stake) coupled with a bullish narrative.

Now - nothing is a guarantee.

This short-term trade could mirror - and outperform - the performance of Bitcoin going into the approval of the bitcoin ETF.

But it could not. Maybe it’ll go to zero tomorrow because the devs rug. No one knows - not financial advice.

For some of you, this will be way too complicated. I fully get that.

But some of you might already have an Xverse wallet - which you may have used to buy Ordinals in the spring.

You can buy STX on Coinbase, Binance or OKX and send it to your Xverse wallet.

1/ Su Zhu weighs in on SBF - which is like Elizabeth Holmes weighing in on Bernie Madoff

2/ Bank of America reports $132 BILLION unrealized loss in Q3

3/ Bitcoin ETF approval could add $1 trillion to crypto market cap