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Market Talk: #bitcoin bull run starting!? BINANCE FINED 4 billion!?
Recorded: Nov. 20, 2023 Duration: 1:07:50Space Recording
Full Transcription
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And, you know, one thing I've been saying on the show, as well as our other speaker panelists, usually when you get to that later part of November going to Thanksgiving, early December, there tends to be a pullback that sets you up for the Christmas rally.
If we take a look at 2019, we started dumping on like the 10th of November and then we bottomed out right around Thanksgiving at about 6400.
And then we rallied all the way upwards to 10K in Q1 of 2020, shortly before the pandemic occurred.
And, you know, I don't have to get into detail about that.
But, you know, history doesn't rhyme, but it often repeats itself when it comes to seasonality, right?
We saw seasonal headwinds occur in late August and early September.
And now we're seeing that kind of mid-Q4 seasonality, right?
Everyone is sipping on their games, buying gifts, realizing some profits.
You can call it even tax harvesting, right?
Taking some gains off the table to pay taxes, things like that.
But, anyways, I'm here joined by Tone Vaze.
Last time we spoke was back in the summertime, so it's going to be great to catch up.
Oh, yeah, I'll bring up – Tone actually has a conference, by the way, guys, which I'm sure we can talk about later on in the show.
But here joined by Tone Vaze, Drake on Digital, and Dow Chemist.
So it's just going to be us today.
This is likely going to be, you know, a shorter show, probably wrap up by the time, you know, we close in on one hour.
A lot of the guys are taking, you know, some plans for vacation and all that stuff.
Even myself, right, Thanksgiving week.
And, yeah, going to enjoy this tiny break.
I haven't really taken my eyes off of the screens for the majority of the year.
But it's going to be a great conversation nonetheless.
So, before we get started, I want to give a huge shout-out to our sponsor and partner, Femex.
You guys can check the details of that partnership up above on the Nest.
So, Tone, welcome back to the show, man.
How are you?
And most of all, man, how are you feeling about the crypto markets going into 2024?
Thanks, man.
Yeah, I remember that time we did a show back in the summer.
I was up in my cabin in the woods of Pennsylvania.
Now I'm back home.
Home is Panama for me these days.
We'll see what happens next year.
And I am super bullish on the Bitcoin markets.
I've been very bullish on the Bitcoin markets pretty much all year.
Just to recap 2023, I was, of course, not buying the $15,000 dip as a trader because consolidation at the lows,
for me, is usually a bearish sign.
But when the price of Bitcoin rallied early in the year, off of $15,000 up to $25,000, fell back to $20,000.
And that $20,000, I believe it was in March or April, for me, was the ultimate buy the dip.
But I called it pretty much almost to the day that this might be the last time Bitcoin will ever be at $20,000.
And so far, that's holding true.
We rallied from that $20,000 up to $30,000, then fell back to $25,000.
I felt the same way.
We bounced off of $25,000 twice.
This more recent one was a little bit less suspicious because the whole up move in the last two months started off of a fake tweet by Cointelegraph.
I'm sure you guys remember that, that the ETF was approved.
And, of course, that was false.
But that kicked off the nice bull run.
And I also said it when that happened that that false tweet made people realize that they are underweight Bitcoin.
And it was one of those false news stories that is likely to, you know, continue to prop up Bitcoin for a little while.
And that held truer than even I anticipated.
I thought that we would have a bit of a pullback down to the $28,000 or, at this point, even $31,000, $32,000 range.
And we remain very resilient here at 37 and a half with the presidential elections taking place last night in Argentina.
Again, I was very surprised that Malay won or that Malay was allowed to win.
And now that makes me question, is he really going to be the disruptive force he claims to be?
Or was it all bullshit and his entire presidential campaign was a bunch of lies, like most politicians?
So we wait and see if he's going to be, you know, another Bukele or, you know, another Maloney in Italy or, say, an Obama in the U.S.
where they talk a good game of making changes and then do the complete opposite and continue with tyrannical government leftism once they get into office.
So we will find out.
But I am so far, I'm very happy for the Argentinian people that they elected someone that they wanted.
And I think that is helping drive the price of Bitcoin higher in the last 24 hours.
For some reason, people think that he's going to be adopting Bitcoin or he's going to be very open to Bitcoin.
He has said very little about Bitcoin.
He's mostly talked about, you know, getting rid of the Argentinian peso and getting rid of the central bank and stabilizing the currency by adopting the dollar.
But when you when a presidential candidate starts talking about, you know, libertarian ideas and getting rid of the central bank, it immediately, you know, for Bitcoiners, it's like, oh, he's going to adopt Bitcoin.
He's going to adopt Bitcoin.
There is an in-between stage.
I think he's more for the in-between stage.
But if Bitcoin goes to a new all time high, everything is possible.
I mean, this is what I've been waiting for.
Everyone is waiting for the El Salvador experiment to either succeed or fail.
And the moment Bitcoin goes to a new all time high, it proves that the El Salvador experiment was a success.
And at that moment, a bunch of countries will be considering adopting Bitcoin.
And the only region that can do it is really Latin America.
Europe's not going to do it.
Eastern Europe's not going to do it.
Asia is not going to do it.
The only and the Western countries are sure as hell aren't going to do it.
The only region is Latin America because of their connection to El Salvador.
And it's very easy for those leaders to go and meet with the lights of Bukele.
And I know he already has plans for his immediate vicinity of Central America, Guatemala, Honduras, Nicaragua.
But other countries in South America, they're right there.
I'm in Panama.
I mean, Panama is a long way away because Panama has a stable currency.
It uses the U.S. dollar.
But Panama is also interesting.
We can get into that.
But I'm going to leave it here.
I'm bullish for many reasons.
And feel free to ask away.
Great stuff, Tone.
We actually have Dow here who's been doing some traveling across Latin America.
So, Dow, brother, what's going on, man?
Great to have you on the panel.
How are you doing the development of these things during your travels, man?
You've been saying this for months now.
Yeah, thanks, man.
Thanks for having me on the panel.
Always great to be here.
I'm actually not too far from Panama.
I'm in Colombia, Medellin.
I've been doing a little bit of traveling as well to Mexico and Brazil.
And actually, there was a conference, actually, a Latin American conference in Bogota about a month and a half ago.
And it was inviting people from those countries, from Mexico, from Brazil, sadly, not from Venezuela.
It would have been great to hear from them.
But the consensus, at least, you know, and those, by the way, the conference is really more bank friendly.
So, it was really a suit and tie, very corporate.
And it was really about, like, what can they do with crypto, right?
As opposed to just the currency.
Is there technology there?
Are there gains of efficiency in the back office and things of that nature?
So, there was starting to talk about DeFi.
Nowhere near actually using it.
But as Lee was saying, right, there's a lot of in-between stage, right?
There is the innovation team at a bank that might look at some tools.
Maybe not quite DeFi just yet.
But stable coins are being used, right?
And not within the bank so far.
But if you talk to people in Venezuela and Colombia, that's a major use case.
A lot of issues Latin American countries have in common is the instability of the currency.
And so, we may in crypto think that the dollar is still not a great currency.
But relatively, right, if you look at all those currency falling together,
the dollar is falling at a slower pace than others.
So, for them, it's a great hedge against inflation.
And that use case actually can be applied to Africa and potentially to Asia.
So, yeah.
So, throughout my travel, I got to see two types of conversations.
The conversation that we tend to have on crypto Twitter, which is around, you know,
being bullish and token goes up and some speculation on future use cases.
But you can also hear the present use cases, remittance using stable coins as a hedge.
And even increasingly, and that was a great highlight of the conference, is potentially looking at lending
and how small to medium enterprises in Latin America have a really hard access to low interest loans from their banks.
If you're a farmer, if you're a manufacturer, it's really hard for you to secure a loan out of good interest.
And so, potentially, the collateral that we're starting to see in crypto, those bridges, the integration platform that we're starting to see
in real-world assets and that narrative, that's starting to have a resonance amongst, you know, the innovation team at our banks, right?
So, we're a long way from adoption, but people are playing with technology and they get familiar with it,
the concept of it, and where there might be some gains in efficiency.
So, I agree with Tone, Latin America is very promising.
My two cents is on Brazil.
The central banks, they are very open to crypto, not just as an asset, but also as rails for financial services.
With the current discussion that we're starting with this space, Tone, I wanted to ask you this.
Do you think it'd actually be possible for us to break the four-year cycle and potentially break the all-time high of $69,000 in the Bitcoin price before the halving?
I think that is very, very unlikely.
I just don't see us going up that high.
It would need some serious, like a serious catalyst, and I just don't see a big catalyst on the horizon.
The halving is also only, you know, five months away at worst and four months away, possibly.
So, yeah, I don't see it.
And also, I wouldn't see it as breaking the four-year cycle.
A four-year cycle tends to have, you know, a bottom and a top.
And, yes, the top usually comes first, the bottom comes later.
But even if we do go to a new all-time high, we're going to keep going up.
Like, even if we break the $68,000 top before the halving, which I doubt, it's not going to stop there, right?
Like, once we break $68,000, we're probably going to break $100,000.
And we're certainly not going to reach that $100,000 top in the next five months.
I mean, look, anything's possible.
But I just don't see it.
And if we do, that means we're probably going to keep going right through the halving.
Then the top could be quarter mil.
I don't know.
I'm more conservative.
I think we're near the top already.
I think maybe $42,000, maybe $45,000 at best.
And then a pullback with the halving.
And the real bull market will probably start in about eight, nine months.
I mean, that's when we start breaking $50,000, and then we're off to the races.
Man, and we're also seeing some interesting developments when it comes to, I like to call them all coins on Bitcoin.
I know we have Drake here on the panel who's been going absolutely crazy on the BRC20 aspect side of things.
And, Drake, welcome to the panel, brother.
Would love to know your thoughts on the adoption discussion that we're having right now.
And I know we usually don't have these kind of discussions.
And we usually talk, you know, different sort of narratives.
We'll leave the adoption talk mostly for when we break all-time highs, truthfully.
But that's from my own personal bias.
So, Drake, I'm going to open up the floor to you, man.
What's going on, brother?
How are you?
What are you seeing in the markets?
Yo, what's up, guys?
Yeah, so as always, the same thing for crypto.
So, I mean, if you're taking the outlook that you think the markets are still a bit shaky or it's getting a bit toppy,
I think the best thing to do is just get exposure to Bitcoin and ETH.
That way, worst case scenario, you do have exposure to the upside.
However, if you are taking the look that, hey, you feel like the market's recovering a bit and there are some plays to be had,
which in my opinion there are, like, there's a lot of, the markets are waking up.
A lot of degen plays are actually playing out.
You can't go wrong grabbing a couple of altcoins.
Sometimes it seems like the market is starting to gravitate towards the risk on.
So, if you are someone who doesn't like the degen and mess around with that stuff, which there's nothing wrong with it,
like, you get rug pulled and you go to zero, like, all the time within, like, seconds,
then look towards the mid-cap to high-cap tokens and get exposure to some of those.
Like, one of the, some of the prominent ones are, like, the AI narrative.
Like, if you just want exposure to that, there's a lot of altcoins that have higher market caps
that will be able to take the liquidity, like your renders, your tau, your kosh,
but obviously look for pullbacks on those type of things.
But if you're more degen and you're open to trying new things,
I would say to take a look on the Bitcoin side.
Wabi, you kind of just mentioned it in talking about BRC20s and whatnot.
I think we're going to have an era similar to what we did with cell phones.
The same thing is going to happen with crypto.
So, let me explain what I mean.
With cell phones, we started out with, like, the dialer.
It was a corded line, da-da-da-da, whatever.
Then we went to the cell phone, which was a big blocky thing.
And everyone was like, okay, this is cool, awesome.
I got a phone in my car.
Then we got to the smaller cell phones, and then it was phone calls.
And eventually, we went back to texting.
And if you go all the way before we even got into the phase of cell phones, we were texting.
And that was through, like, Morse code and whatnot.
And I see the same thing happening into crypto, where eventually we get to the point where there's so much technology that's been developed in different protocols and things that can be used that those nuances won't matter anymore.
And people gravitate towards the things that they enjoy or like or some things that they're looking for that don't necessarily have to do with the technology, which, in this case, would be ordinals on Bitcoin.
It's slow.
It's boring.
But people think, oh, man, this is the coolest thing ever.
And, yeah, sure, it is different than NFTs because you now own the actual NFT.
But it's slow.
Like, you can actually do the same thing on Ethereum with ETH descriptions, but people are doing it on Bitcoin because it's, quote, unquote, more secure.
It's less.
It's not as tech savvy.
And I see we're going to have this phase with Bitcoin.
The same thing is going to happen with Doge as well for the people who can't play on Bitcoin.
It'll be like phase two of the OG era.
But people are going to be playing on Bitcoin and it's going to have its DeFi moment, similar to what Ethereum had.
So Bitcoin is in the early days.
I feel like this bull run is going to be the run for DeFi tokens on Bitcoin.
Like, they are going to outperform the markets the most.
And, yes, you're still going to have your stuff over on Ethereum and the other chains.
But I think the most adoption and the most growth is going to be over on Bitcoin.
It just has the best platform right now to receive that growth.
Drake, man, I remember during the bottom in December and in January when BTC was just hovering and ping-ponging between 16 and 17K.
And, you know, when I would have, you know, I call them the laser-eyed army, right, where, like, if you mention anything other than Bitcoin, you know, they come at you with torches, right?
And I remember asking them a question about, you know, what if the next cycle, there's some sort of way where, you know, there can be sort of an altcoin market or an NFT market on Bitcoin.
But I just threw it out there that it might look different than what we perceive as, quote, altcoins.
Wabi, it's coming, man.
It's not different.
And then, like, I was just, I was just received with a ton of backlash, man.
I think during the time between 16 and 17, a lot of people were saying, oh, no, now Genesis is going to solve the $8,000.
You might even, you know, stay between eight, okay, for a long time.
The massive recession is coming, and it's, like, in the belly of the beast, in the bottom, dude, that's when, in my opinion, that's when we're so back.
In terms of so over, we're so back.
I kind of think we're so back if we crash and over for, like, parallel, right?
Because, you know, we're kind of near at the end of what happened on the moon phase.
And I'm sorry, that moon phase from the 2020 one, but we're kind of getting nostalgic.
And so I actually want to play in Tone's brain about this, man.
Tone, what are your thoughts on the current, I guess you can call it innovation when it comes to Bitcoin?
And, you know, also, I do see that you have, like, your conference page on.
I'd like to know if you guys are going to be having any individuals that are building that kind of stuff on top of it.
Yeah, let me jump in there.
You're breaking up for me a little.
I don't know.
Is it me or did anybody else?
Yeah, yeah, for me as well.
Yeah, me too.
Okay.
Yeah, it was pretty bad, but we were listening hard.
Right.
Okay.
So it wasn't me.
That's all I needed to know.
Yeah.
So we actually, we are, we are going to have a panel about, you know, second layer Bitcoin project at Unconfiscatable.
There'll be somebody that's, you know, going to represent ordinals.
I think there is someone that's going to represent the BRC20 stuff.
Personally, I mean, those projects don't interest me at all from a personal perspective, but I really don't mind debating them.
I know ordinals have been a hot topic in the world of Bitcoin, BRC20 less so, but if BRC20 is becoming popular, then sure, I'm happy to discuss it.
Now, from my point of view, in general, other than speculation, I have not seen a single project built on top of Ethereum that I have ever found interesting.
Not a single one at any point in time.
And most of them have come and gone, and I still don't see a single project that is interesting to me.
Now, Ethereum itself is also not interesting to me because it's not a decentralized layer.
The only thing that's interesting to me has always been Bitcoin.
Now, when it comes to ordinals, there's certainly been spiking the transaction fees on Bitcoin, so I may have to start using the Lightning Network sooner than later because transactions are just getting too expensive.
But that's not a problem because expensive transactions create more security for the Bitcoin network.
See, that is not true for the other tokens.
High transaction fees do not lead to additional security in other tokens.
So Bitcoin is once again unique.
Now, the reason why BRC20 stuff has never really taken off on Bitcoin, and maybe it will this time, but I'm still very, very skeptical.
The main reason why all this nonsense was built on top of Ethereum.
Well, one reason is Bitcoin developers didn't see it as important, and they certainly missed out on the hype train of the BRC20 speculation that raised the price of Ethereum greatly.
I mean, Bitcoin could have benefited from that kind of hype.
We can also debate whether that would have been good or bad.
It certainly would have been good for my net worth and many others.
But as far as, you know, stability of the protocol and security of the protocol, who knows?
It could have, you know, it could have ended badly.
So we don't know what would have happened.
But to me, one of the reasons why BRC20s have not taken off is because when someone builds an ERC20,
or someone builds on top of Cardano or Solana or Polkadot or, I don't know, BitConnect, whatever, right?
When someone is building on top of these other projects, like an Ethereum,
the person that they are targeting is an Ethereum user.
And an Ethereum user has already proven himself to invest in crazy speculation and doesn't care about decentralized, you know, savings like Bitcoin.
So because they're an Ethereum, like it's so much harder to separate a Bitcoiner from his Bitcoin into a speculative project
than it is to separate an Ethereum person from his Ethereum into a speculative project.
Because by them holding Ethereum, they've literally proven they're willing to invest in crazy stuff.
And this is why I remain very skeptical on BRC20 projects,
because of the nature of the person they are trying to convince to invest into the BRC20 digital token.
Now, on the ordinal side of things, I think the ordinal crowd is a little off on what an ordinal is.
And I'm not an ordinal expert, but I'm just using basic logic.
To me, the best thing an ordinal does is to put inscriptions into the Bitcoin blockchain.
Now, the Bitcoin blockchain is immutable and it is the most secure.
So you can write whatever you want to write into the Bitcoin blockchain.
And it'll be there forever with an ordinal.
But the ordinal crowd believes somehow that they actually have control of that Satoshi
that wrote the stuff into the Bitcoin blockchain.
And I don't believe that is possible.
Now, right now, yes, there are some wallets being made where you can pick and choose
which Satoshis you're going to hold on to and which Satoshis you're going to move.
But right now, the majority of the people using Bitcoin, they want Bitcoin to be fungible.
They don't have control of individual Satoshis.
So when you take possession of that Satoshi through an ordinal,
it's going to get mixed with your other Bitcoin and it's going to get sent out.
And if there are way too many wallets that are now keeping track of these Satoshis,
there is probably going to be a big movement on the Bitcoin development side to end this thing.
Because one of the beauties of Bitcoin and its goal to be this global replacement for money
is that it's fungible.
One Bitcoin equals one Bitcoin and one Satoshi equals one Satoshi.
Having Satoshis that have individual value to them starts to deteriorate the fungibility
aspect of Bitcoin, which is something a lot of us don't really want to see.
Now, there were always these plans for things like color coins,
but that has to be done on the sidechain.
Now, I love the liquid sidechain.
I don't know why other people don't.
But in a liquid sidechain, or back in the days, there was a project called Color Coins,
where a company like Apple or Netflix, whatever, you know, secure one Bitcoin,
which could be worth millions of dollars.
And that's your barrier to entry.
You secure a Bitcoin.
You put that Bitcoin on a sidechain.
You break that Bitcoin into 100 million Satoshis.
And then each Satoshi represents an equity of your company.
Like Apple stock could be 100 million Satoshis for 100 million shares of Apple stock,
representing a single Bitcoin.
And that trades in its own sidechain.
And then, sure, each Satoshi has, you know, represents a share of Apple stock.
Like, but there's still 100 million shares of Apple stock,
and they are all fungible within each other.
It's just that it's another use case to attach something to a Satoshi.
But if all these Satoshis end up with their own individual value,
then it starts to eat away at Bitcoin's fungibility.
So let's see where it goes.
I'm a free market guy.
Let's see where the market takes us.
But I'm happy to, you know, rationally discuss a lot of these projects on top of Bitcoin.
And the more it's built on top of Bitcoin, you know, the more demand for Bitcoin,
the more price of Bitcoin goes up.
So at the end of the day, I'm not going to complain too much about it.
Tona, I also wanted to pick your brain about the equity markets, man.
We saw IWN put in a lower low last month.
And, you know, it's absolutely ripping in the face of QQQ, putting in a new year-to-date high.
And I like to look at the Qs as sort of a leading indicator for what's to come for the crypto markets, man.
What are you personally seeing as far as the equity market side of things, man?
Are you anticipating new highs still for the SPX and the NASDAQ?
I am.
I remember that discussion we had over the summer.
And I was very bullish on stocks.
I mean, stocks haven't really gone up much from the summer.
But overall, this has been a decent year.
The S&P 500 is only 5% below the all-time high.
NASDAQ is doing even better than that.
And the Dow Jones is the best of the bunch.
Now, Russell is down in the toilet.
And a lot of people are confused by this dynamic.
Now, I have always had an explanation for this over the last year or so,
where this, to me, is a reflection of international capital flows.
It's not the domestic market.
It's not the Americans that are investing in all these stocks.
It's mostly foreign money.
It's the uncertainty in Europe, the uncertainty in Eastern Europe, even Asian markets.
It's international capital finding safety in the American stock market.
And when international capital enters the American stock market,
they don't invest in market cap number 1,874 like you find in the Russell.
They go for the big names.
They go for the Dow Jones stocks.
They go for the NASDAQ 100 stocks.
And the S&P is made up of those stocks plus a few extra.
And this is what you're seeing.
Now, this is not – I didn't come up with this understanding.
I got this understanding from Martin Armstrong, who I think is one of the better economists out there with a blog.
I've been reading him for 10 to 15 years now.
It's been a while.
I was reading him before I discovered Bitcoin.
He's very anti-Bitcoin.
He thinks it's stupid, but that's okay.
I learned a lot from him on economic side.
And this is why, in this bull market, I was ready for this exact thing where the Russell is irrelevant.
All these small companies are irrelevant.
It's all about the big companies because that's where the money is going.
The bond market is a complete joke.
We had this little debate on your channel here in the summer, I think, with Michael Green.
And I was bullish on the equity market, and I was bearish on the bond market.
And I thought rates were going to keep going higher, and the bonds were going to keep getting decimated.
And no foreign country is going to be buying American bonds.
And we just saw that a few weeks ago where there were no interest in buying American long-term debt from any international player.
And it's great to hear some of our politicians try to cut back on this international aid for the war effort.
But any time I hear a politician say, we're borrowing money from China to send to Ukraine, I cringe because we're not borrowing money from China.
China has stopped buying U.S. government bonds years ago.
They've been selling the stockpile of government bonds that they had.
So the politician is right in that we're borrowing money and sending it down the toilet by funding the Ukraine war.
But we're not borrowing it from China.
We're borrowing it basically from ourselves or from our Western partners like Japan.
So they're a little wrong on that one.
You know, Russia doesn't want our bonds, China doesn't want our bonds, and the BRICS don't want our bonds.
That's a big problem.
And the U.S. is going to get itself in a lot of trouble with these high interest rates.
And when no one wants to borrow your debt, you have to keep raising the interest rate so that somebody borrows it.
Right. So it's like if you want to borrow money, but nobody wants to lend you money, but they'll lend you money if you offer them a high enough interest rate and they believe that you can pay it at least for a short amount of time.
So I remain very bullish on the equity market, not because America is so great.
I think America is in deep trouble, but there's nowhere else to hide your money.
It's literally American stock market and Bitcoin.
And once American companies, the Teslas and the Googles and the Facebooks start buying Bitcoin like MicroStrategy has, you'll see that the stocks of these companies going up like MicroStrategy and therefore the S&P 500 and other indices go up as well.
Now, I'll go ahead and open up the mic to the rest of the panel.
We'll start off with Chris and then Dow.
I know you had something to throw in our direction, man.
Chris, what's going on, man?
Welcome back.
What's up?
Bobby, how are you, mate?
I'm doing fantastic, man.
I'm doing absolutely fantastic.
Never better, brother.
Numbers going up, right?
It's all good.
Yeah, that's all.
That's all I really pay attention to, man.
I know, especially going into 2024, man.
I'm feeling quite pumped, to be honest.
It's definitely going to be an exciting time.
I don't know if you've talked about Argentina, but there's lots going on in the world, right?
But I have a question for Tone, actually, because I'm really interested in the kind of sort of trad fight.
And I don't mean that in any other way other than exactly what I mean by that.
It's sort of traditional finance versus Bitcoin.
There definitely seems to be a big move, obviously, with BlackRock.
There's a lot of people taking it seriously that maybe didn't historically.
And I'm interested in the value proposition.
You know, Wabi, you've been very clear.
You're a trader.
Its number go up.
You're looking at it as a speculative asset, in effect.
But then, Tone, some of the stuff that you kind of recognize with the U.S. economy and how potentially, you know, dangerous that could be going into the future.
What do you see as the value proposition?
And secondly, do you sort of have any consideration around self-custody and whether or not that's something that people that are playing in this market should start to look into and do research on?
So, I didn't really catch the exact question, but I'm just going to comment across the board on these things.
Yes.
All of a sudden, everyone in TradFi became interested in Bitcoin the moment BlackRock said something about Bitcoin and started creating the Bitcoin ETF.
So, yes, everyone suddenly is interested.
Is the Bitcoin ETF a game changer?
No, absolutely not.
We've had a Bitcoin ETF.
It's a GBTC.
The difference between a spot ETF and GBTC is going to be literally 2% difference, the management fee difference.
And in a bear market, a Bitcoin spot ETF will drive the underlying price even lower, something GBTC wasn't able to do.
And that's why only the GBTC holders saw a huge loss in their portfolio because of the GBTC discount.
But it didn't reflect on the actual underlying Bitcoin price.
So, for everyone that's screaming that a spot ETF is going to be great, yeah, it'll be great on the upside.
It's also going to be terrible on the downside.
So, everything evens out.
Okay.
Now, I am very bearish on the United States as a country.
I am bearish on the United States as a world reserve currency and a, you know, single dominant superpower.
I think those days are over.
I think by the end of this decade, the United States will be lucky to remain a single country.
I think it's going to break up.
And, but that's just my personal view.
Now, one of the reasons I am very bearish on the United States.
Oh, one second, guys.
Hold on.
Sorry, I have to sneeze.
One of the reasons why I am super bearish on the United States is because in order to remain a global superpower, you need the control of three things.
Fuck, not sure why I'm sneezing all of a sudden.
But you need the control of three things.
You need, and in no particular order, you need a trusted political system.
It can either be a transparent democracy or a, you know, a very good dictatorship, right?
Like a king, right?
Like a good king.
So, like a monarchy.
So, you either need a respected monarchy or a transparent, respected democracy.
America lost their transparent, respected democracy with the 2020 election, and it's only going downhill.
The next thing you need is a transparent and efficient and trusted economic system.
And once again, the United States proved in 2022 that the SWIFT system and the U.S. dollar can be nothing more than a weapon when they kicked Russia out of SWIFT.
And now there is a huge alternative being built for the global south and the BRICS.
And Saudi Arabia is no longer, no longer cares about using the U.S. dollar.
Basically, it's not even the money printing.
Like, I don't care about the money printing.
The United States supports the world.
It's the arrogance of the United States that they can pick and choose who uses the financial system and the rails that they've built.
So, the United States built what they did based on trust.
People sent all their gold to the U.S. after World War II, and they used the American rails for the financial system around the world.
And America is now proving, I mean, they've stolen multiple countries' gold.
They're just basically proving to the world that the economic system that they're maintaining is political and not to be trusted.
And finally, the third thing a superpower needs to maintain their dominance is a strong military.
And once again, I said this in real time with that video of the American plane taking off from Afghanistan, where, like, people are hanging onto the plane.
America basically proved that their military is, for the lack of a better word, a total horseshit.
And they're proving it again with the debacle in Ukraine and the upcoming debacle in the Middle East.
And they're about to start a war with China.
So, after the Afghanistan situation, they proved to the world that their military is nothing to be scared of.
And that's why Russia wasn't scared of the U.S. military when they went into Ukraine.
And Hamas ain't scared of the U.S. military when they went into Israel.
And, like, that's it.
And China sure as hell ain't scared of the U.S. military either.
So, these three things are going to cause the collapse of the United States.
So, I think it's over for the United States.
No one is going to reverse the Titanic, not Trump, not RFK, not Vivek.
That's pretty much done.
But I'm very bullish on the American stock market.
And this is one of the things that I really need to try and explain it to people.
Most of the companies that drive the American stock market don't have to be American companies.
These are international companies.
They don't need to be domiciled in America.
Netflix doesn't have to be an American company.
One day, maybe all of this is going to be on top of the blockchain, on top of the Bitcoin blockchain, the only blockchain that matters.
So, there is still lots of innovation happening.
Elon Musk and what he's building, the new AI, all of the new AI companies that are going to come out.
So, there is lots of innovation still left to happen.
And right now, the U.S. dollar is the most stable currency.
But one day, maybe it will be Bitcoin.
So, I'm still bullish on technology.
I'm still bullish on innovation.
I'm still bullish on the stock market.
But the stock market can't exist without the United States.
Because the top companies are mostly virtual now anyway.
And even Amazon, you know, they can ship around the world.
I live down in Panama.
I'm actually pissed that Amazon doesn't ship to Panama.
But why not?
Maybe if they were more of an international company and not an American company, they would ship everywhere.
Like, they would resolve that problem.
So, this is why I'm continuing to be very bullish on the stock market but bearish on the United States.
Chris, is that all you had for us, brother?
Well, I suppose just the last part of my question was around self-custody.
I mean, you know, Tone, what's your view on self-custody versus using custodians?
Do you think that, you know, if custodians have an incident, get rugged, you know, they're kind of at the moment deemed to be more trustworthy.
I think companies want someone to sue.
I kind of understand the argument on both sides.
I don't necessarily agree, but I get it.
Where do you stand on self-custody for the spectrum of different users?
I guess you maybe don't view one size fits all, but I'd be interested to hear your views on it.
Well, yeah, absolutely.
Self-custody is very, very important from multiple perspectives.
I do have concerns for people that don't hold on to their custody.
Now, from a number-go-up perspective, custody doesn't matter.
Like, if you only care about making money from Bitcoin, custody doesn't matter.
But for those that really want Bitcoin to last another hundred years, custody is incredibly important.
Because one of my biggest fears is with the mining ban in China, about a year ago now, I think it was in a year and a half now, in the summer of last year,
I was very concerned that all the mining came to the United States.
To me, it doesn't help decentralize Bitcoin.
I actually liked it when all the mining was taking place in China.
Because most Bitcoin development is actually in the U.S.
Most Bitcoin nodes are in the U.S., or at least in the West.
And most Bitcoin mining is also in the U.S.
I'm loving the fact that the Middle East is seriously getting into mining.
One of the biggest miners is out in UAE, where I was just spent three weeks at.
And my biggest, my bigger concern is custody.
Way too much Bitcoin is custodian in the United States.
Coinbase custody, GBTC has 600,000.
Coinbase has a lot.
You know, I think Bitco has some.
Like BlackRock is going to have some.
So we could be at a point in 10 years where 30 or 40 percent of all the Bitcoin is being custodied by American companies.
And just like in 1933, where FDR confiscated all the gold, how did he confiscate the gold?
He just made a phone call to all the banks and told them that all the gold is now his and the country's.
So I can foresee a future where, you know, Brian Armstrong and Barry Silbert and BlackRock CEO, they all paid a visit at the same time by, you know, the authorities basically saying, hey, that Bitcoin is now ours.
And suddenly the U.S. government has 30 or 40 percent of all the Bitcoin in the world.
And that that day scares me a lot.
So the more people hold Bitcoin in their custody, the less you're I mean, you're protecting yourself from that day.
Had people held on to their gold and not kept it at the banks, FDR would not have been able to confiscate it.
The only reason he was able to is because it was all centralized at the banks.
The U.S. authorities never went door to door.
They no one ever was arrested for not turning in their gold.
I mean, a lot of people were trusty.
They came in and turned it in, but they could have held on to it.
It would have been perfectly safe.
And Bitcoin is no different.
Wavi, thanks for letting me up, mate.
And Tony, thanks for answering my questions.
Thanks, guys.
Yeah, no problem, man.
All right, Dal, I know you had your hand up earlier, brother.
What's going on?
Yeah, can you guys hear me?
Perfect.
Loud and clear, man.
Loud and clear.
Great, great.
Appreciate that.
Yeah, so going back to ordinals, there's definitely a topic that I like because I'm on the east side of things.
So, I think the narrative of Bitcoin has been great so far, right?
The store value, kind of comparing to gold, digital gold, I think it works, right?
And to Tony's point, there's been a lot of pushback traditionally from calling the maxi, if you want, to add any kind of additional utility, especially to go in the direction of its organization.
So, the ordinals, as far as I know, is like work around the latest update of Bitcoin.
So, it wasn't really planned.
It wasn't really like a consensus among, I'd say, like the default leaders or, you know, the people involved in the Bitcoin community to go in that direction.
And so, even though I see a lot of excitement around that market, there's actually, in a weird way, a consensus among the BTC maxis and the ETH heads in the sense that it's a great place for speculation.
But if you start to actually move away from Bitcoin, the asset, and to start to think about what Bitcoin can add in terms of tokenization and utility, then it's a completely different ballgame.
Because then it's really about the developers, the tooling, and the investment.
And as a joke, you kind of look at it as Game of Thrones, right?
Like, if you have armies, what matters is the number of developers, right?
Like, how many are there?
How long have they been there?
What toolings do you have access to?
How much funding do you have to have access to?
And unless you get dragons that you can hide in your army, most likely, unless you have some of the best developers in the world, you're going to have a really hard time to compete for the largest army that's best funded and has the best tools.
And have been building a lot of experience and best practices over the years.
So, I think when it comes to just even the idea of calling them BRC20, there's an issue where the, I would say, like, the reference that people have in their head when they talk about fungibility or non-fungibility is around those standards that have been ossified first on Ethereum, but now we're across the crypto ecosystem.
So, when we talk about tokens, the ERC20 is not the greatest standard ever.
There's been other standards on Ethereum, but it's the one that captured the imagination, and it's the one that all developers are building around.
And so, when you hear the BRC20 within the Bitcoin community, it sounds weird because you would think that if they go the route of fungibility, it would look something different.
They wouldn't look at, let's see what the Ethereum crowd has done and do something similar, right?
But unfortunately, I think once it's standard ossified in the crypto space, it's hard to create something different.
So, unfortunately or not, even when it comes to ordinals and inscriptions, people do compare them to NFTs, even though they're not really NFTs.
But by comparison, they look like a poor man's NFTs.
So, I think when it comes to that narrative of tokenization and utility, unfortunately, I don't think that's going to be more than speculation on Bitcoin.
And there's not, I mean, maybe someone can make the argument against it, but I don't see where that would come from that you would get this different value that hasn't been already built on Ethereum, on Solana, and all the other smart contract chains.
So, I think in a weird way, Bitcoin is great at what it's been doing already, at building this great asset that's store value.
But even when you look at Lightning Network and other scaling solutions, they will maybe work at some point, but it takes really long time for them to build up versus all the ecosystem.
So, I'm a lot less bullish on that aspect of Bitcoin.
Let me comment on the developers real quick.
Like, it's not about the quantity of developers, and it's not about having the best developer.
Like, I've heard a project, it's like, oh my god, we have the greatest developer in the history of humankind, because every developer thinks they're the greatest developer in the history of humankind.
But a single great developer is not going to create a great project.
And 8,000 developers are also not going to create a great project.
You need just a perfect mix of high quality and a large enough quantity.
This is where Bitcoin has been able to shine over the years.
But a more important aspect of it is, once again, it's not about how great your developer is.
It's about the mindset of that developer.
You can have the smartest guy ever, but if he's using his talents for the NSA and the CIA, how useful is that guy, right?
So, this is why, once again, Bitcoin development has outshined every other project, because the people that came to work on Bitcoin have proven themselves, not only with their skill and abilities of development, they've also worked on many projects that were straight-up privacy-focused.
And, again, that's another reason why I've always liked Bitcoin, and I haven't seen something like that in other projects, unless there was, like, a money grab, and they just wanted to create a token.
If that was the case, right, we see a shelling point, right?
Most developers who gravitate towards the tools that are greater to build what they had in mind, right?
And let's pick one technology that I think most of us can agree on is, at the bleeding edge of cryptography, zero knowledge.
When it comes to zero knowledge, most of the developers have picked ecosystems like Ethereum, like Polkadot, and others, but not Bitcoin, right?
We can see definitely some projects going in that direction, but not even close to the same amount of funding, the same amount of development.
And then when we look at the end result, there are more advanced projects that are building, let's say, roll-ups or even privacy layers on top of those smart contract chains.
And so I think, to some extent, yes, I can hear the pushback about it's not about the number or even the quality, but there is a growing consensus among developers,
because I think most of them that come into the ecosystem don't have an ideological bias, right?
They're just looking for the tools to build something, right, that maybe have an idea in mind.
And then when they scan the ecosystem, that's where they start to get a consensus that this is where you can build, let's say, DeFi application.
This is where you can build a decentralized network for, I don't know, some kind of like backend system.
So I think the developers are speaking by the tools that they pick.
All right, hey, guys, I have like maybe 10 more minutes max.
Yeah, I was going to wrap up anyways, man.
I wanted to ask you, usually with these spaces, I like to ask, you know, what is the pain trade going into the end of the year?
So tell them for yourself, what would be the pain trade for you, you know, going into 2024?
What do you mean by pain trade?
I'm not following.
So by pain trade, by pain trade, is you're asking BTC to go to 50K?
Would pain trade be, you know, perhaps we retest the year we open?
Perhaps we even have, you know, we've had some guys here that are proponents of the melt-up theory,
where they actually think all global markets peak in Q1 of next year.
And then we go into a deflationary bust.
And some other people have even gone on record to say that, you know, the melt-up is going to happen within the next few weeks.
So I would be very surprised that Bitcoin is above 42,000 this year.
I think 41, 42 is the ultimate top.
I'm surprised that we're still holding up so strong at 37, 38.
I really thought a pullback down to 30,000 is in the cards.
So for me, the low side of the market is 31, 32 realistically and 28, as low as 28,000 on, you know, pessimistically on the pullback.
This is, this can also happen this year or in early next year.
As for the traditional markets, I remain bullish.
I just don't see a big catastrophe and I will only change my mind if the lows of October are broken to the downside.
Drake, what's the pain trade for you, brother?
I would say altcoin season.
That would be probably one of the biggest pain trades.
Most people are either sitting in Bitcoin dominance or either sitting on the sidelines.
And I just think if we see some of these altcoins just ripped, which most people are not even in them, including me.
I mean, I'm in a lot of altcoins, but like not like bull market mode altcoins, if you know what I mean, Wabi.
But I mean, I think the pain trade would be like all these DJM altcoins on these different chains, like the Solana altcoins or the Phantom altcoins or the Avalanche altcoins just completely ripping.
I think that would be a huge pain trade.
Sorry for all the noise.
That's my bird.
She's going nuts.
All good, brother.
Dow, what's the pain trade for you?
I'm super bullish on real world assets.
There was a report from a traffic institution that they expect like tens of trillions of assets being onboarded and brought on chain from bonds to real estate to stock.
All kinds of different financial primitives can be brought on chain.
And there's excitement, obviously, from those financial institutions as well.
Dow, Dow, Dow.
Hold on, brother.
I met the pain trade.
What's the pain trade?
Not what you're bullish on, brother.
Yeah, yeah, yeah.
I heard of paying trades.
So I'm not bullish on that.
Pain trade, man.
Like, for me, the pain trade would be, right, CZ gets arrested.
We retest the yearly open.
And, you know, ETH retests like 800 within like 24 hours of CZ getting arrested.
I find it quite strange how, like, we pumped right after, I think it was within a 15-minute candle.
We pumped pretty swiftly right as that news event hit.
And then we just started dumping on some lower time frames.
So that would be the pain trade for myself.
All the yearly games being retraced.
And we test the yearly open and then fulfill the quote-unquote black swan event that people like to LARP about as we head into the heavy.
Yeah, I'd say any action against Binance to take them down and shut down all operations, I think it would be a massive blackout on the space.
People would have to reassess a little bit to centralize the exchange in general because, like, it comes after FTX and all the others.
And now Binance as well.
I think that would – just like outside of crypto, people are still iffy about crypto.
It's real value.
As Tony was saying, like, most crypto projects, people just see that as speculation.
So if even the exchange can be trusted, then I think it's a black eye on the entire space.
Chris, what's the pain trade for yourself, man?
Well, you heard it here first, Wabi.
I think the SEC is going to declare Ethereum a security.
And then all the shit coins are going to go to zero and Bitcoin to the moon.
I meant pain trade for yourself.
Damn, even I don't think that's going to happen.
Yeah, pain trade for yourself, man.
Not something that you want to see.
I'm sorry.
I'm only in Bitcoin, so there's no pain here, buddy.
It's all good.
Even if we go down, I just buy more.
Even if you wake up and you see BTC at, like, 4,000?
Yeah, man, I back up the truck if it goes to 4,000.
I'm backing up the truck.
That'd be base, man.
We all wake up and BTC is at, like, 8,000.
That'd be pretty base, man.
I would be delighted.
But, you know, I think as long as fundamentally nothing changes with Bitcoin and it goes down to that level, then it's just volatility, right?
If there's a reason for it outside of that, like, I don't know, suddenly SHA-256 gets destroyed and then Bitcoin's the least of our worries because literally all encryption goes.
So, you know, there's scenarios where you could go, yeah, okay, that's the end of the world.
But otherwise, I'm pretty bullish.
So, all good.
Cool.
All right.
I'm going to wrap up here, guys.
Hope you guys have a good rest of your Thanksgiving week.
We'll be back tomorrow on YouTube at 10.50 a.m. Eastern time with Market Check.
I want to thank Tone, Drake, Dow, and Chris for participating on today's show.
I'll be back tomorrow at the same time for you guys here on X Spaces at 4.20 p.m. EST.
If you guys enjoyed this space and this is your first time listening to us, we're BecauseBitcoin and my name is Wabi.
We're a financial media news company with a very heavy emphasis on all things digital assets.
Today was actually quite a change of pace.
We actually spent most of the time talking about, like, you know, the intricacies of, like, quote-unquote Bitcoin innovation, right?
So, a change of pace is always appreciated.
So, thank you guys once again.
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Bye-bye.
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