🧠 El Salvador did a total 180°

Therapy Recap: El Salvador after 2 years on bitcoin, 3 bull market catalysts and Coinbase adding Lightning

GM.

Welcome to Bitcoin Therapy. The newsletter that’s like your friend whispering sweet Bitcoin knowledge into your ear. The best kind of ASMR.

First, happy and relaxing Sunday to 2,411 patients reading today. 👋 

Just came back from a 5-day vacation in Mauritius. Just in time to send this banger to you guys. Enjoy!

Here’s what I got for you this week:

  • El Salvador after 2 years on Bitcoin: success story or total failure?

  • 3 catalysts that will trigger the 2024 bull run

  • Coinbase finally adds Lightning. But why 5 years late?

Estimated read time: 4 minutes and 34 seconds

Before we begin, a big thank you to Stamp Seed for sponsoring this week’s email. ❤️

EL SALVADOR’S BITCOIN LAW: 2 YEARS LATER

 

Time flies so fast (especially in Bitcoin land)!

It’s been 2 years since El Salvador adopted Bitcoin.

Here’s a TLDR of how it went down:

On June 9, 2021, El Salvador’s parliament approved the “Bitcoin Law,” making the orange coin an officially recognized legal tender.

And by doing this, all eyes turned to the small Latin American country that was previously known for its world’s highest crime rate.

Since then, El Salvador has achieved the following:

  • 82.8% increase in tourism in 2022, making it one of the countries with the highest tourism recovery rate

  • El Salvador’s “volcano bonds” are 90% this year (making them best performing in the world)

  • Launched country-wide Bitcoin education effort (+300,000 Salvadorians have received a Bitcoin diploma)

  • Increased its international credit rating from CC —> CCC+

  • Removed ALL taxes on bitcoin and technology innovations

The last one is huge. Here’s what Milena Mayorga, El Salvadors’ US ambassador, had to say about it:

“Every day, companies are calling us here at the embassy to ask us how they can transfer their operations.”

Milena Mayorga

So yeah, adopting Bitcoin worked out pretty well for El Salvador. The Latin nation went from the class clown to straight A’s student

What’s happening in El Salvador hasn’t gone unnoticed. Other nations are following Bukele’s example:

  1. Bhutan 🇧🇹

  2. Indonesia 🇮🇩

  3. The Philippines 🇵🇭

  4. Honduras 🇭🇳

But make no mistake: the global elites will resist this. 

El Salvador is making people at the IMF and WEF very nervous.

DON’T WRITE YOUR SEED PHRASE ON PAPER

I stand by the title. Why? Because securing your generational Bitcoin wealth on a piece of paper is… let’s just say, not very smart.

This is why I use Stamp Seed - a titanium seed storage solution.

  • 100% offline cold storage =100% peace of mind

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Be your own bank, anon. Get your Stamp Seed here.

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3 BULL MARKET CATALYSTS

I have no memory of what I was doing 1 year ago. But I remember exactly what our boy Big Mike Saylor said a year ago.

Saylor predicted that Bitcoin would reach $5 million per coin IF these 3 catalysts are reached:

1. Spot ETF approval

Big TradFI players are lining up to file for Bitcoin ETFs.

In fact, there are more ETF applicants than there were people queueing for Yeezys when they dropped the first time.

Here’s a list of current Bitcoin ETF applications:

  • BlackRock - $9T AUM

  • Fidelity - $4.5T AUM

  • Franklin Templeton - $1.4T AUM (the newest entrant)

  • Invesco - $1.5T AUM

  • WisdomTree - $87B AUM

  • VanEck - $77.8B AUM

  • ProShares - $65B AUM

  • GlobalX - $51B AUM

  • Grayscale - $50B AUM

  • Roundhill - $1B AUM

  • Bitwise - $1B AUM

Are you old enough to remember when these same guys were shitting on bitcoin just a few years ago? I rememba.

So what will happen to Bitcoin once ETF goes live?

Well, let’s take a look at what happened to Gold when an ETF when it was introduced in 2004:

  • Saw $1B in inflows within the first few days

  • Surpassed the S&P500 Trust ETF as the world’s biggest ETF

  • Gold hit an ATH 8 years late

So yeah…a Bitcoin ETF will be pumpy.

2. Fair value accounting rules from FASB  ✅

And no, it doesn’t stand for ‘Fetal Alcohol Syndrome’.

The Financial Accounting Standards Board (FASB) unanimously voted to use “fair value” accounting to report crypto assets.

“Bro, who cares??”

Hold on. This might not seem as sexy as Bitcoin ETF, but make no mistake, this is yuuge. Why? Because this will make holding Bitcoin much easier for companies.

Here’s how it worked before FASB and now:

Before: Companies were required to report bitcoin as an intangible asset on their balance sheet.

This meant that it had to be recorded and kept at the purchase price, EVEN if it went up or down. This also meant that companies had to take a loss on their books even if they didn’t sell.

Now: Companies can record their crypto assets at a fair value.

Let‘s look at MicroStrategy Q1 2022 as an example:

  • Without FASB: $131M net LOSS

  • With FASB: $39M net PROFIT

TLDR: it used to be a pain in the butt for companies to hold bitcoin. Now it’s much easier for massive companies like Amazon and Apple to hold bitcoin

Check out https://bitcointreasuries.net/ to see in real time which public companies hold Bitcoin today.

3. Traditional bank custody of BTC ✅ (partially)

I say partially because most banks still don’t offer crypto custody for their clients. And those that do only offer it to “sophisticated” institutional clients.

For example, earlier this week, 1.3T€ Deutsche Bank announced they would allow clients to hold crypto at the bank.

As you can see, 1.5/3 of Saylor’s bull market catalysts are already reached. It will take some time for the market to price in a Bitcoin ETF, FASB, and banks offering Bitcoin custody.

BTW, don’t let banks (or anyone else) hold your bitcoin. Hold your own keys and use an indestructible product like Stamp Seed to control your financial future.

COINBASE TO FINALLY ADD LIGHTNING

Coinbase officially adds Lightning! ⚡⚡⚡

Here’s what Coinbase CEO Brian Armstrong Tweeted earlier this week:

I don’t think I need to say it out loud, but this is obviously very bullish for Bitcoin. This would give Coinbase’s 100 million users an on-ramp to faster and cheaper Bitcoin transactions.

More LN usage will drive more capital, developers, and entrepreneurs to build on the payment layer. And this is good because it pumps my bags (and yours too 🤝).

But why is Coinbase doing this now, 5 years after LN was launched? Surely they had the resources to implement it earlier…

3 reasons why Coinbase is doing this now:

  1. Brian genuinely thinks Bitcoin is the most important asset in crypto and believes in LN

  2. They realize they’re in the depths of the Bitcoin bear market and know they need Bitcoin to survive

  3. Brian saw the former president of PayPal, David Marcus, on CNBC last week saying how awesome Lightning is and got FOMO

I think it’s number 2 and 3. Coinbase doesn’t do anything unless it makes them money directly (like adding new dog coins).

Psst…Brian. Want some advice? While you guys add LN, please remove all the sh*tcoins. Their narratives will be destroyed by LN anyway. Thanks!

Anyways, congratz to Brian and Coinbase for finally capitulating and adding something that has actual real-world use cases.

RABBIT HOLE READS 🕳️……🐇

  • Binance.US’ CEO, Head of Legal, and Chief Risk Officer have all quit within 2 weeks. I told you something shady is going on in that amateur bucket shop…

  • The CEO of Thodex (a Turkish crypto exchange) was found guilty of fraud and was sentenced to 11,196 years in prison. Lol.

  • Vitalik Buterin’s Twitter was hacked, and $690K was stolen from his followers via an NFT phishing link. And people trust this guy with their money 🤡

THIS WEEK IN A MEME 📅

Mauritius was fun. Back to monk life.

FROM THE ARCHIVE 📁

This legend is smiling on his yacht.

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See you next Sunday,

Bitcoin Therapy Team

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