DAiM Issue 41
Welcome to DAIM's Newsletter. DAIM is a licensed Registered Investment Advisor and asset manager for digital assets and bitcoin 401(k)s. Please enjoy our thoughts below.
2024 Recap
Looking Ahead
Thinking in bitcoin
As 2024 comes to a close, it’s fascinating to look back at the range of predictions made at the end of 2023 and compare them to how the year has actually played out. The sentiment at the time was overwhelmingly bullish, fueled by excitement around spot bitcoin ETFs, institutional adoption, and bitcoin's well-established historical cycles. Let’s revisit some of the key forecasts and how they measured up to the reality of bitcoin in 2024.
Predictions for year-end 2024 ranged from $100,000 (Standard Chartered) to an eye-popping $400,000 (Max Keiser), with most assuming a major influx of capital following spot ETF approvals and growing institutional interest. These forecasts leaned heavily on bitcoin’s fundamentals: its fixed supply, increasing mining costs, and the potential for institutional inflows to drive up demand.
Bitcoin’s price climbed steadily throughout the year, spurred by a combination of ETF-driven inflows, increasing adoption in global markets, and a broader recovery in risk assets. However, none of the most optimistic forecasts—like $250,000 (Scaramucci/Draper) or $350,000 (Saylor)—came close to being realized. Bitcoin reached an all-time high of 108,000 on December 17th surpassing the $100,000 benchmark. In addition, mining activity and network security reached all-time highs, with global hash rates surging as miners capitalized on rising prices and favorable market conditions.
Even though bitcoin reached six figures, it still fell short of most of the prognostications. So what held bitcoin back in 2024? Despite ETF approvals, the global regulatory landscape remained fragmented, slowing broader institutional adoption. The election results seem to be an inflection point for pro-bitcoin regulation, so this shouldn’t be a limiting factor going forward. Another unavoidable but healthy explanation is profit-taking. After explosive rallies, many early investors and miners took profits, creating resistance at higher price levels. Having a plan and taking profits along the way is necessary for successful investing.
As of December 27, 2024, bitcoin hovers around $95,000, falling short of many high-end predictions but still delivering returns that make tradfi jealous.
Looking Ahead - The optimism expressed in late 2023 wasn’t misplaced—it just needs more time to fully materialize. The groundwork laid in 2024, particularly with institutional infrastructure and ETF adoption, positions bitcoin for continued growth in the years ahead.
With the halving just months behind us, many of the same bullish factors (reduced supply, increasing demand) remain in play. Predictions like Bernstein’s $150,000 by year-end 2025 seem increasingly realistic, while forecasts like Cathie Wood’s $1.5 million or PlanB’s $340,000 remain aspirational. However given bitcoin’s historical ability to surprise on the upside, we wouldn’t bet against it.
2024 proved to be a strong year for bitcoin, if not quite the meteoric rise some had envisioned. The journey from $100,000 to $400,000 or more was always going to take time and multiple catalysts. What this year has shown is that bitcoin’s fundamentals remain intact, its adoption continues to grow, and its role as a cornerstone of modern portfolios is becoming undeniable. For the first time we’ve seen a large institution recommend a 2% allocation to bitcoin.
As we move into 2025 and beyond, the outlook for bitcoin remains bright. While some of the more aggressive predictions may seem distant, they underscore one undeniable fact: bitcoin continues to stand out as one of the most compelling investment opportunities of our time.
Thinking in Bitcoin - Over a decade ago, someone famously purchased two pizzas for 10,000 btc—a transaction that feels unimaginable today. That moment, now celebrated annually as Bitcoin Pizza Day, reminds us just how far we've come in understanding and valuing bitcoin. As adoption grows and bitcoin continues to mature as a store of value, we may soon see a fundamental shift in how we think about pricing everyday goods, services, and other investments. In today’s world, we measure bitcoin’s worth in dollars, euros, or other fiat currencies. But as bitcoin’s stability and acceptance increase, it’s not hard to imagine a future where we think about the cost of things directly in bitcoin terms:
A Single-Family Home: Instead of saying “$600,000,” we might say 0.75 btc.
A New Car: What once cost $40,000 could simply be priced at 0.05 btc.
Everyday Expenses: A cup of coffee might be 0.00001 btc (10,000 sats), while dinner for two could be 0.0001 btc (100,000 sats).
Traditional securities: $450 per share for Tesla, is .00056 btc.
This shift is more than a change in numbers—it represents a transition to a world where bitcoin isn’t just a speculative asset but a true unit of account. As more people start holding and transacting in bitcoin, its fixed supply ensures that its purchasing power will continue to grow over time, making smaller fractions of a bitcoin increasingly meaningful.
The implications of pricing in bitcoin are profound, starting with wealth preservation. Unlike fiat currencies, which lose value over time due to inflation, bitcoin allows you to measure your purchasing power in terms of how much of the world’s goods and services your holdings can command. Its borderless nature also paves the way for global standardization, offering a universal pricing standard and removing the complexities of currency conversions. Additionally, bitcoin’s limited supply fosters a deflationary mindset, where holding onto your bitcoin becomes more appealing than spending it frivolously, marking a shift from today’s inflation-driven consumption habits.
This could lead to a world where liquid investments are charted against bitcoin, enabling investors to easily compare the opportunity cost of other assets relative to bitcoin’s performance. If bitcoin continues to be the best-performing scarce asset for another decade, it could become the ultimate benchmark for evaluating investments, redefining how we measure returns and financial decision-making.
As we move further into this decade, it’s exciting to imagine a future where prices aren’t tied to the whims of central banks or inflation metrics. Instead, they’ll be rooted in a fixed and predictable currency: bitcoin. The day may come when buying a home for 0.75 btc feels as natural as paying 10,000 btc for pizza once did—only this time, we’ll all know the value of what we’re trading.
How DAiM benefits clients
Model Portfolio: Our meticulously managed portfolio has consistently outperformed the simple strategy of buying and holding bitcoin alone by more than 590% since inception on 5/31/2018.
Wealth Management: As a licensed Registered Investment Advisor (RIA), we cater to clients with diverse financial needs, including Trust accounts, brokerage accounts, and IRAs. Our services encompass comprehensive tax strategies and audits to optimize your financial outcomes.
Tailored Solutions for Various Investors:
Individual Professionals: Busy individuals like doctors who lack the time to stay updated on market trends.
Altcoin Exposure in Retirement: Investors seeking exposure to alternative coins within their retirement accounts.
Intergenerational Wealth Planning: Large families aiming to create and manage intergenerational wealth, including gifting in bitcoin across multiple generations.
Simplified Management: Investors overwhelmed by the complexities of managing multiple wallets and decentralized exchanges (DEXes), finding it challenging to track or rebalance their assets promptly.
Bitcoin Options Trading: Investors looking to manage risk or generate additional yield through advanced strategies like bitcoin covered calls and zero-cost collars.
Bitcoin Lending: Investors seeking opportunities to lend their bitcoin and earn interest while retaining ownership of their assets.
Enhanced Support and Communication: We understand the frustrations of navigating communication with crypto exchanges. At DAIM, we provide easy access to expert guidance, ensuring seamless communication for our clients.
Curious to Learn More About Investing with DAIM? Contact us at hq@daim.io