To investors,

Bitcoin hit an important milestone last night. The digital currency had the highest all-time weekly, monthly, and quarterly close in history. This means that bitcoin is more popular today than it has ever been.

The four prior times that bitcoin hit a monthly and quarterly close all-time high, the price of the asset appreciated at least 300% more throughout the rest of the current bull market.

It is unprecedented for this milestone to occur before the bitcoin halving. This should be a bullish sign, but we simply won’t know for sure until the halving occurs and we have the benefit of hindsight.

Speaking of the halving, we are approximately 20 days away from that event occurring. It is slated to occur on April 20th (that is 4/20 - you can’t make this stuff up!) and will drop the daily incoming supply of bitcoin from 900 bitcoin per day to only 450.

This is noteworthy because the halving is occurring in the midst of a demand shock from the ETF approvals. Just as billions of dollars are flowing into the asset, the incoming supply will get cut in half.

Basic economics suggest that the price will have to go materially higher to accommodate everyone.

The price action and market structure, combined with the ETFs and halving, should get most people excited about the next 12-18 months for bitcoin. There is another element that I believe is important to call out.

I wrote to you all on February 27th and laid out an argument that bitcoin’s increase in price could be an alarm sounding on inflation being a bigger problem than we expected. I wrote to you again on March 13th and explained that the latest inflation data was proving inflation is actually accelerating right now, not decelerating like the year-over-year number would suggest.

There is a very strong argument that some portion of people are buying bitcoin in anticipation of higher inflation through the next few months. This scenario would be a recreation of the Great Inflation of the 1980s.

With that said, as I discussed on CNBC’s Squawk Box this morning, it is impossible to pinpoint a single narrative as to why people are buying bitcoin. The digital currency serves different purposes for different people. One person may buy bitcoin for speculation, while another buys it as a hedge against inflation, and another buys it for the censorship-resistant properties.

You can watch the full discussion here:

Bitcoin is a complex asset that is operating in a dynamic environment. It will take decades for the majority of the world to understand the asset and figure out whether they should allocated to it. We are 15 years into this journey. There is still plenty of work ahead.

Hope you all have a great start to your week. I’ll talk to everyone tomorrow.

-Anthony Pompliano

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Mike Novogratz is the Founder & CEO of Galaxy Digital. This conversation was recorded at Bitcoin Investor Day in New York.

In this conversation, we talk about the macro environment, bitcoin, political overlay, regulation, what Galaxy is doing, and how Mike sees the next couple months playing out.

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Mike Novogratz Explains Why Bitcoin Keeps Going Up

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