Bitcoin and ETFs Can Reshape the Future of Finance

Bitcoin: The Antidote to Rising Inflation and Tax Surprises

In the context of the rising inflation witnessed over the past three years, it’s vital to recognize its implicit effect on taxation. Without adjusting tax thresholds for inflation, many individuals find themselves subtly pushed into higher tax brackets, effectively paying more without a real increase in income. This phenomenon becomes evident when observing the recent upsurge in IRPF collections. Moreover, while the impact on VAT (IVA) has been more buffered, it still underscores the silent increase in our financial burdens due to unchecked inflation. Take a look at this graph:

First conclusion: If you do nothing with your money, you are losing money.

More than that, everyone is losing money. And people don’t like it. The question is, what will they do?

Bitcoin can be a great solution. ETFs, or Exchange-Traded Funds, which are investment funds traded on stock exchanges similar to stocks, can be an instrumental tool in opening up this market to millions of individual and institutional investors. 

To gain perspective, the market cap of the DEFI sector is less than 1T (only $518,365,120,429 for BTC alone), while the combined funds managed by ETFs that have already applied to the SEC to operate with their Bitcoin ETFs (with those for ETH, Polygon, etc., to follow) manage over 15T.

Imagine that 1% of these ETFs, within a reasonable period, for instance in three years, decide that BTC’s intrinsic properties compared to the USD and gold convince them to save using BTC. How could a buying pressure of 0.15T impact the price?

This would represent 20% of the entire BTC Market Cap, but the problem is that there aren’t enough BTC for everyone. You don’t need to do much more math. 91% of the total Bitcoins have already been mined, 19M of the total 21M, of which, it’s estimated that 23% have disappeared. And exchanges are running dry. We discussed this in an article a few months ago [Link].

If you want to have more references about the possible impact of the ETF in BTC, take a look at this graph where you can see the impact on Gold:

So if you have a Bitcoin, keep it safe; they are becoming increasingly sought after.