- The two signals I’m watching with bitcoin’s rally…
- Private capital is making space tourism a reality…
- This is a very dark practice in the health care industry…
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Now let’s turn to today’s insights…
Bitcoin’s price explosion has the industry asking key questions…
Bitcoin’s price has exploded over 400% since early October – quintupling in less than five months. As a result, its market capitalization (market cap) has eclipsed $1 trillion for the first time ever.
Market cap refers to the total dollar market value of an asset. In bitcoin’s case, we can roughly think of it as how many dollars are “parked” in bitcoin at any given time.
To put this in perspective, bitcoin’s market cap was just below $200 billion early in October. Yet Visa, MasterCard, JPMorgan Chase, PayPal, and Bank of America had market caps of $430 billion, $343 billion, $304 billion, $228 billion, and $216 billion, respectively, at that time.
In other words, bitcoin was still considerably less valuable than America’s top banks and credit card companies.
Fast forward to today, and it is a completely different story. Bitcoin is more than twice as valuable as each of these companies.
The blockchain community has long anticipated the $1 trillion market cap benchmark as a major milestone for bitcoin. That’s the level at which the community believed institutional adoption would occur.
And that’s exactly what has happened.
As we have discussed several times recently, traditional firms are now allocating a portion of their treasury to bitcoin. And the legacy credit card companies are enabling merchants to accept the digital asset as payment.
That said, most in the industry didn’t expect bitcoin to move this far so fast. That’s got the blockchain community buzzing. People are trying to explain what’s going on right now… and they’re forecasting whether or not it will continue.
Some say that this is just a speculative mania. They say that low interest rates are forcing the big firms to “reach for yield” with more speculative assets because they can’t get a meaningful return on conservative assets like bonds.
Others say that the institutions are adopting bitcoin as a store of value and a defense against inflation. They liken it to digital gold because its supply is mathematically limited. Only 21 million bitcoins will ever exist.
I think what happens in the coming months will answer these questions. And I’m watching two specific items closely…
First, I want to see if governments around the world increase their efforts to inhibit or ban bitcoin and cryptocurrencies. It’s no secret that some governments see bitcoin as a direct threat to their own currencies. Will they act on this? And if so, will they be effective?
I am also very interested to see what happens with bitcoin when inflation increases. And make no mistake about it – inflation is going to surge.
The U.S. government has been furiously printing money since February of last year.
According to the Federal Reserve’s own data, $3.4 trillion have been generated from thin air since February 26. That’s largely in response to the economic lockdowns and other foolish policies enacted in response to COVID-19.
And now we are talking about another $1.9 trillion stimulus package to boot. (I recently put together a presentation about the financial “great reset” I see coming as a result of these events. Go right here to learn more.)
Any time we see trillions of dollars being created from nothing at all, we are going to see inflation. It may take longer than we expect for it to show up in our daily cost of living, but there’s no doubt inflation is coming.
How will bitcoin behave when that happens? Will investors and institutions flock to it as a safe haven? Or will they flee it for what they consider more conservative assets? That will be telling.
As for me, I remain long-term bullish on bitcoin. But I think it is overdue for a correction in the short term. What we are seeing right now is pure speculation, and it won’t end well for some.
Axiom Space is on the rise…
We last talked about Axiom Space back in November. That was when the private space company announced that its first mission would take four passengers up to the International Space Station (ISS) in a SpaceX Crew Dragon module as early as January 2022.
It’s an incredible milestone in the industry – the first privately funded mission to the ISS. And because the company has gained so much traction, it just raised $130 million in a Series B venture capital round. That’s quite an impressive early stage funding round.
And even more telling was that CEO Michael Suffredini said the company is well past the point of being a unicorn. That means Axiom is now worth more than $1 billion. This makes it one of the 10 most valuable private space companies in the world – a remarkable feat considering Axiom Space was founded in 2016.
The timing of the raise was obvious. With its first big mission less than a year away, Axiom needs to staff up as fast as it can. That’s one reason why it raised so much money in its Series B round.
Of course, this trip to the ISS is just the first step in Axiom’s bigger plan. The ultimate goal is to build habitation and commercial modules that connect to the ISS. These modules will form the foundation for the world’s first privately owned hotel and research facility in space.
From there, Axiom plans to build an entire station around these modules. And once the ISS is decommissioned within the next 10 years, Axiom’s space station will detach and stand alone. It will be the world’s first space station managed entirely by a private company.
That leaves me wondering… Which family will be the first to take a vacation to Axiom’s space hotel? Believe me, the day we read about that in the papers isn’t too far away.
I’m incredibly excited to watch Axiom continue to execute on its plan. The excitement reminds me of the early days of SpaceX.
And I don’t think it will be long before Axiom reaches decacorn status – a valuation of $10 billion.
Beware the Facebook of health care data…
We will wrap up today by shining the light on what I think is a very dark practice in the health care industry.
Fourteen of the largest health systems in the United States just teamed up to form a new company called Truveta. Led by Providence, these health systems represent about 13% of all hospitals in the U.S.
The goal? To pool patient health information in a single database in order to determine if information can be extracted for “the greater good.”
On the surface, this may sound reasonable. But there is a big problem here.
Truveta is a for-profit company. Its entire business model is based on aggregating patient data and selling access to that data to other parties willing to pay for it. And the company will do this without ever telling patients… much less asking for consent.
This is baffling to me. How is it okay to sell our most sensitive health information to the highest bidder? How is that legal?
Of course, Truveta claims it will anonymize the data it sells. But it is not safe for us to believe that our data will be secure or remain anonymized.
Just two months ago, news of the SolarWinds hack broke. It was determined that Russian spies had infiltrated major U.S. corporations and many U.S government departments, including all six branches of the military.
If even the highest levels of the U.S. military cannot keep their data safe from hackers, do we really expect a small startup like Truveta to do so?
And get this – one of the companies exposed in the SolarWinds hack was Microsoft. And do you know who the CEO of Truveta will be? A former Microsoft executive. I couldn’t make this stuff up.
What’s more, Truveta is washing its hands of all responsibility. The company said that hospitals will determine the best approach to inform patients of what’s being done with their data.
Again, how is this legal?
This is a terrible idea. It’s like Facebook managing our health care data.
There are such simple mechanisms that can be used for patients to consent, or not, to data collection and analysis efforts. And there’s even the potential for patients to get paid for their own participation.
After all, if Truveta is monetizing patient data, shouldn’t the patients receive part of the revenue generated if they choose to participate?
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