Blockware Intelligence Newsletter: Week 162
Bitcoin on-chain analysis, mining analysis, macro analysis; overview of 1/18/25 - 1/24/25
Bitcoin: News, ETFs, On-Chain, etc.
For months on end, the dialogue of the Bitcoin community has centered around a Strategic Bitcoin Reserve. While an SBR, in some form, is almost inevitable at this point, and we’ll discuss exactly why in this newsletter, this is not the only bullish catalyst at play for 2025.
We are going to start today’s newsletter by highlighting all of the reasons we are bullish that are NOT the Strategic Bitcoin Reserve.
—– Reason Number 1: SAB 121 has been REPEALED –—
Staff Accounting Bill No. 121, an SEC guideline implemented under the Biden/Gensler administration, was a major source of friction for financial institutions looking to offer Bitcoin custody products to the market. This guideline has been repealed.
This is just as bullish as the creation of the Bitcoin ETFs – allow me to explain.
Under the guidelines of SAB 121, an institution holding Bitcoin on behalf of a client (custodial services, commonplace with all major Bitcoin exchanges) must record that BTC on their own balance sheet, as both a liability and an asset. A liability, representing the fact that they owe it to the client whenever the client wants to take personal custody of it, and an asset, representing the institution's control of the Bitcoin.
This can result in major headaches due to Bitcoin’s price volatility. Massive fluctuations in the institutions liabilities and assets, due to BTC which they technically don’t even own, they’re holding it on behalf of their customers, creates an illusion of instability on their balance sheet, which could deter potential investors. Given that nearly all of the large banks in the United States are publicly traded, they are (were) subject to this SEC guideline. Hence why Chase Bank, Bank of America, etc. don’t (yet) offer Bitcoin to their clients. That would require them offering custody, which would be subject to this ruling.
This is no longer the case.
Over the course of 2025, don’t be surprised when household-name banks in the United States start offering Bitcoin to their clients. Anytime there are rails developed to transfer capital from the legacy financial system into Bitcoin, that is a bullish development. The ETFs opened a similar portal – where funds in investment accounts could easily be allocated to Bitcoin. Now, thanks to the repeal of SAB 121, and the subsequent infrastructure that is to come, funds from the checking and savings accounts of all Americans will, in due time, be able to seamlessly allocate to Bitcoin.
The irony, of course, is that Bitcoin is a far superior alternative to traditional banking – and the ultimate ideal of many Bitcoiners is to usurp the legacy system. Some may view this as a step in the wrong direction, but that’s far from the truth. This is the legacy financial system capitulating to Bitcoin, not the other way around.
Reason Number 2…