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🏆 Crypto: 3 BIG winners, 1 loser

🏆 Crypto: 3 BIG winners, 1 loser

PLUS: Elon Musk's new company

Alex M.
July 13, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: if crypto does well, so will bitcoin and ETH. But who are the non-obvious winners and losers if crypto keeps rising?

Let’s dig in.

🥔 Today’s meat and potatoes

Get smarter on crypto in 2 minutes

One of our jobs at 2036 is to bring you opportunities we suspect you might not be paying attention to.

And there are a handful of interesting investments that we believe could win big over the next few months as crypto keeps rising.

So without further ado - here are 3 potential non-obvious winners for the next six months (and one non-obvious loser):

First up, the potential WINNERS…🏆

1/ GBTC 🥇

GBTC is an investment fund that owns bitcoin. And because GBTC shares are not redeemable for bitcoin, they can trade at a premium or discount to the value of its underlying bitcoin.

The SEC denied GBTC’s conversion to an ETF last year, but the tide seems to be turning. The market is starting to believe it’ll get approved.

We started covering it when it traded at a 38% discount to the value of its bitcoin.

We then updated you when the discount narrowed to 31%.

Today, the discount is just 27%.

If GBTC gets converted to an ETF, the discount will likely close immediately. That’s an additional +40% return on top of any increase in the price of bitcoin.

*Sweet*

GBTC has been a non-obvious winner this year.

Bitcoin is up +83% year-to-date. But GBTC is up +140% in the same time frame.

We suspect this trend could continue if a bitcoin ETF gets approved in the next months.

2/ Coinbase 🥈

$COIN is a stock that trades like a proxy for the crypto market.

Coinbase makes money from stablecoins, staking, trading, and transaction fees.

But Coinbase might also become the custodian for a large number of Bitcoin ETFs.

The institutional issuers of ETFs (Blackrock, Fidelity, etc.) won’t store the crypto themselves. Instead, they’ll use a company like Coinbase.

For a long time, Coinbase traded roughly in line with Bitcoin.

But in the last two weeks, the trend has started diverging… and Coinbase is trading higher, up +156% year-to-date relative to bitcoin’s +83% gains.

Two roads diverged in the woods…

3/ Arbitrum & Optimism 🥉

Every once in a while, Ethereum undergoes a major upgrade. The last one enabled unstaking and brought ETH to its highest price in 11 months.

Yesterday, the Ethereum Foundation announced Ethereum will undergo another upgrade in Q1 2024.

The upgrade will decrease fees for blockchains (called Layer 2 chains) that help Ethereum scale by lowering its costs and increasing its speed.

Arbitrum and Optimism - two popular Layer 2s that we’ll cover next week - are likely to be some of the biggest winners of this upgrade.

Their tokens have cooled down from their all-time-highs and could be interesting buys at these levels…👀

Now, onto the potential LOSER…Microstrategy 🏦

Microstrategy is the brainchild of Michael Saylor, the biggest institutional fan of bitcoin until Larry Fink ate his lunch.

You haven’t heard a bitcoin explanation until you’ve heard Michael Saylor’s - like this one:

#Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster, and stronger behind a wall of encrypted energy.
— Michael Saylor⚡️ (@saylor)
6:51 PM • Sep 18, 2020