BTC Sessions - Bitcoin Flirts With 40k As Michael Saylor Pitches the Long Game ep144

Episode Date: February 5, 2021

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Wasabi wallet and fairly private. What is going on, everyone. Welcome to the show. I hope you've had a good week. The price seems to be back on the up and up, and things are looking up. Lots of bullish stuff going on this week. We've got Michael Saylor and Microstrategie

with their corporate event, I suppose, where they're effectively just shilling Bitcoin to corporations. So it's been an exciting week. going to cover that and much more today. Welcome to the show. I am Ben with the BTC sessions, and this is your daily session. All right, before we dive in, of course, let's take a look at where we are in the market. We're sitting around 37,600 some odd dollars per coin, and for one US dollar, you can pick up 2,659 sats. That has dropped since last week by a fair amount.

In terms of how many Bitcoin have currently been mined, 88.66% will be at 90% by the end of the year. And if you're looking to get some transactions through, if you're looking for next block, it's going to be around 151 sats per byte. But if you're willing to wait an hour, 47 sats per byte will do you. And before we dive into the news, of course, shut out to sponsors of the show.

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For reference, I am using the Coba Vault Pro, which has the fingerprint scanner and the rechargeable battery. I live on Bitcoin. You guys know this. I've been living on Bitcoin for quite some time now, but I do have to eat. I've got to shop sometimes. And one of the ways that I can do this is through Bit refill. They just have every possible gift card you could imagine. and they have them for a ton of different countries.

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that on paper because, you know, fire, flood, water, accidentally throwing it out, those are all worries that you may have. If you do it with something like the bill fottle over on privacyprose. I.O., you can save your backup phrase in solid steel. So all of a sudden, those worries of a house fire or a flood or accidentally throwing it out kind of go away. So check them out. is a link down below privacypros.io slash btc sessions if you want to check them out and with that let's dive into the news uh as i was saying price seems to be on the way back up um could we be hitting the 40k range again we got up almost as high as 42 at that peak uh in early january and then it's been a while we kind of we did dip down below 30k for a little bit which i mean

for newbies might have been a little terrifying, but this has all happened before. In fact, this is very, very similar. And I keep on saying it, but it's very much reflecting 2017, the bull run where we had the exact same kind of thing. You'd have a huge explosion in price and then you'd have a pullback of 30 to 40 percent. That happened like seven times in the last bull market. Also, those dips, especially near the beginning, they tend to last a little while, like the average. which was, you know, high 40s, maybe around 50 as high as 55 days before recovering to the previous price.

We're like four weeks into this one. So getting towards the end of it, if history does indeed repeat itself. So we could be seeing new all-time highs in the next week, two weeks, who knows? But it does seem very, very similar to last time around. So I guess we'll find out. We'll find out in short order here. Anyways, this from CoinTelegraph, they're just talking about options, open interests, which is effectively people going long or short Bitcoin betting, whether it's going to go up or go down.

And when those contracts expire en masse, then that can sometimes shift the price of Bitcoin depending on who gains the most from those transactions. Anyways, on February 5th, a total of $1 billion in Bitcoin options, open interest is, is set to expire. This number is small relative to the past month's 4 billion options expiry, but monthly and quarterly options typically concentrate the most volume. Friday's expiry is somewhat unusual, although it is balanced at the current BTC levels. Data shows that Bulls have many incentives to push the price above 38K. So, you know, on Friday, you could expect to see some volatility. Maybe that's what puts this back up over the 40K level. I guess we'll see. I'll be watching, will you? Now, that's not the only bullish thing going on here. Michael Saylor, of course,

CEO of Michael Strategy. He's been just stacking stats like crazy since last summer. Apparently, having over 70,000 Bitcoin wasn't quite enough because he stacked another 295,000. Bitcoin for around $10 million in cash just as of February 2nd. So just in the past couple of days here. And that's not the only Michael Saylor slash Microstrategy News. They are currently hosting what they are calling, God, what's the event called World Now? So it's Micro Strategies multi-day World Now conference. Basically what they're doing is their shilling Bitcoin to corporations.

I've been able to watch a bit of it, a few sessions here and there. there honestly pretty solid. I've got to say the content that they're going through. Now, I haven't seen a lot of what's going on today, but it was going all day yesterday as well. And like the intro session, which we'll get into one of the people that spoke. But yeah, it was solid.

Like at one point, Saylor was going through corporate strategy. And he's talking about what you can do to basically plug yourself into, as a corporation, plug yourself into the Bitcoin Monetary Network. And he literally just was second short of basically telling everybody to sell their companies and all their chairs and just buy Bitcoin with it. Like that's how bullish he was.

He was like, okay, well, you want to liquidate all of your cash into Bitcoin. And then you want to, you could forward think, well, what's my revenue every year? And maybe you could get a loan against that revenue to pile that into Bitcoin so that you can lock in the purchasing power of that Bitcoin of that revenue because otherwise the purchasing power of your revenue is going to go down over time. It was just, I mean, I'm all in Bitcoin, but I was watching going, wow, he's pitching this to corporations and they're listening. Wild to see.

Anyways, I'll read a little bit here. In a session today at Micro Strategies Multiday World Now Conference, Saylor said he expects other companies to join him in his in the crusade quote if your company has money on its balance sheet and it's sitting in fiat currencies like euros and dollars they're losing about 15% of their purchasing power each year said sailor appearing to inaccurately imply that all fient currencies are devaluing at a flat rate of 15% a year except for in this article they quote the CPI the consumer price index, which is ass backwards as fuck, in that it doesn't account for important things like food and fuel and housing and asset prices, all things that are very, very important.

So I do find that to kind of be a bullshity part of this article, but hey, whatever, if you look at the chapwood index, side no, sidebar here, if you look at the chapwood index, that actually measures the top 500 things that Americans in each city purchase per year, their top 500 purchases. And if you look at that number, yeah, you're looking at kind of like the low teens in terms of percentage going up. But if you start in adding in assets like housing and like stocks and bonds and things like that, yeah, the inflation rate could be 20, 30%. Anyways, continuing on, I just had to refute that crap. The simple solution is to convert that cash into Bitcoin. We did it. Square did it. You're going to see an avalanche of companies in the coming

12 months also converting their balance sheets into Bitcoin because it's a scarce digital safe haven asset. Yeah, he knocked it out of the park with this one. I got to say when it comes to Michael Taylor and making the point for Bitcoin as a reserve asset and to shelter your purchasing power from central banks, 100%. He knocks it to the park all the time. And it kind of goes to show, given who he had as one of the opening sessions, NYDIG expects to hold $25 billion in Bitcoin for institutional clients by the year's end. So Stone Ridge Asset Management's Bitcoin spin-off firm, NYDIG, already has enough institutional buy orders lined up to push its Bitcoin holdings over 25 bill by the end of 2021. According to the C.E.com.

CEO Ross Stevens. He said, I am confident we'll have over $25 billion of Bitcoin by end of year. I got, I just got this order book. I'm guessing I see what's happening. And he told this to Saylor during the interview. NYDIG currently manages $6 billion in Bitcoin for its 280 institutional clients with at least 96 more waiting in the wings, Stevens said. He said, NYDIG can onboard at least 75 a month. When Sailor was talking to him, he said, I didn't realize there were so many institutions moving so aggressively into this space. And yeah, Saylor personally now has over a billion dollars in Bitcoin buys for the year.

It's crazy. Yeah, anyways, solid, solid interview here. I'm going back to rewatch some of it. I was able to get through most of it, but I got busy. Anyways, definitely worth watching this interview here. Just because Ross Stevens was so articulate with everything that he was saying. There is a lot of buzz about it afterwards. So very worth watching.

Another person that's been making the rounds, some in a positive light for Bitcoin, some people also push back on more recent tweets. But anyways, Elon Musk said he was a supporter of Bitcoin and thinks that it will get broad acceptance in finance. So I'll read a little bit here from CNBC in a discussion on the popular clubhouse audio chat app, which if you're not on a clubhouse, kind of cool actually. I started playing with it.

Lots of bitcoins on there. You can jump into a room and listen. You can be brought up as a speaker. You can all chat. Yeah, it's a lot of fun. Anyways, in a clubhouse audio chat late Sunday, Pacific time, must confirm he was a supporter of Bitcoin. He said, quote,

And this is ironic, given what else we're going to touch on. But he said, quote, I've got to watch what I say here because some of these things can really move the market. Many friends of mine have tried to convince me to get involved in Bitcoin for a long time. Musk said he once ate a slice of, quote, Bitcoin cake given to him by a friend in 2013 and that he clearly should have at least bought some Bitcoin eight years ago, talk about being late to the party. He said, I do at this point think Bitcoin is a good thing. and I am a supporter of Bitcoin. I think Bitcoin is really on the verge of getting broad acceptance by conventional finance people. Now, he said all this just shortly after having added the Bitcoin hashtag to his Twitter bio,

which resulted in a huge spike in price temporarily. We went up to like 38K, high 38s for a little bit there. But, and here's the but. He's also been tweeting a hell of a lot about doge coin. And I think part of it's just trolling because he knows how touchy bitconers are. But yeah, he's definitely been tweeting the hell out of dogecoin. And he said something like it's the common man's cryptocurrency or whatever. And you don't need to be a giga chad to have dogecoin.

And he's referring to Michael Saylor, who is known as the giga chad when he got into Bitcoin. Yeah, I'm kind of got mixed feelings about that. Like, again, it's a troll, but I also have had a bunch of people actually message me about buying Dogecoin. And when I get those messages, I'm like, these types of tweets actually do contribute to people who have no idea what they're doing, actually buying a bullshit meme currency, which basically has no active development and is. like it doesn't even have a supply cap, things like that. People don't know. They just see a tweet and they're like, I'm going to buy that. So yeah, I mean, I mean, look at this guy.

It's not like he cares. He's like basically the richest man on earth. And he can pretty, he's pretty much got fuck you money to say whatever in the hell he wants. So I don't know. Oh, well. Let's move on here. Visa reveals Bitcoin and crypto banking roadmap. Amid race to reach network of 70 million.

So Visa, a one-time enemy of Bitcoin and the cryptocurrency community, is fast becoming one of Bitcoin's biggest cheerleaders. After partnering with 35 various Bitcoin and cryptocurrency platforms in the recent years, the credit card company has announced it plans to help banks roll out Bitcoin and cryptocurrency buying and trading services with a Visa crypto software program set to launch later this year. First Boulevard, a Kansas-based black-focused digital bank will pilot the APIs designed to help Visa bank clients integrate Bitcoin and cryptocurrencies.

Bitcoin and CryptoCustodian Anchorage last month becoming the first U.S. national digital asset bank after it was granted approval for the National Trust Charter from the U.S. Office of the Comptroller of the Currency. That's a mouthful. will hold the Bitcoin and cryptocurrency on behalf of Visa's clients. It's understood banks will be able to allow their users to withdraw and self-custody their Bitcoin and cryptocurrencies. Visa rival PayPal, did I say that right? Visa rival PayPal, which sparked the latest Bitcoin Price Bull Run.

That's debatable when it announced plans to allow its 346 million users to buy and spend Bitcoin on a handful of other major cryptocurrencies. in October attracted criticism for preventing people from moving their cryptocurrencies off its platform. So yeah, I'm not going to go further down this article, but it is interesting to see, it is interesting to see the capitulation where like, you know, Visa, MasterCard, PayPal, all of these companies used to basically shut down your account or prevent you from transacting if you did anything to do with Bitcoin. And that's very much the opposite now because they're like, oh, shit, this is coming.

There's a lot of interest in this. And if we don't pick it up, somebody else will and we're going to lose market share. And they will. Now, I think initially, yeah, all these things that they're building will probably be used by a lot of people. But I think over time, what you're going to see is at least a good chunk of people using different startups,

different technologies outside of these kind of behemoths, behemoth incumbents. And you'll also see a lot of people, I hope, start to learn the virtues of self-custody. I mean, the Robin Hood Wall Street Betts thing where people couldn't use their own money to purchase what they wanted and were kind of forced into selling if they wanted to do anything with their money. That's a perfect example. And it couldn't have been more in your face. everybody can point to that from now on as a lesson in why it's good to self-custody your own money,

especially Bitcoin. And so I think we might see other things like that. Given the new trend, I think you'll see more stuff like Wall Street bets popping up and you'll see more instances of them getting shut down and not able to use their own money because the higher-ups don't like it. So, yeah, I mean, hopefully what Visa's building will allow self-custody, I think, think some will try to corner the market and force people to utilize their platform. But in the end, it's going to be like the open internet versus something like AOL and Comcast, where they had their

little walled garden. And they said, here's the internet that we put together for you and you can't see anything outside of here. And then when people started to be able to email whoever they wanted or go to whatever website they want and it wasn't available on, say, AOL, people realized, oh, well, I need to go elsewhere to do this. And they did. And so now where's AOL? It's not around. So yeah, anyways, that's kind of my take on that.

The capitulation is the big thing for me here. Now, I wanted to touch on this. Miami has been super bullish on Bitcoin, particularly their mayor. And so the mayor is making some moves. They talked about creating or taking part of the city's treasury and putting it into Bitcoin. coin, but there's a few other things here. So I'm going to read a little bit from this story. Miami's mayor,

Mayor Francis Suarez, has been busy adding a personalized touch in trying to bring tech entrepreneurs to Miami, striving to combine the financial elements of New York City and the technology character from San Francisco into a South Florida finance and tech oasis. The mayor is bringing a different attitude and policy outlook on innovation. Among one of the many areas this vision affects is Bitcoin. Something he believes in an interview with Forbes will be the biggest story of the next few years. The mayor admits he's always been fascinated with the idea of Bitcoin.

Its mathematical nature appeals to him and he's aware of the growing popularity of Bitcoin among the American people. There are three tangible paths the city is taking to expand its Bitcoin-friendly nature. Number one, Miami is considering giving its city employees the opportunity to get their salaries paid in Bitcoin. Damn, that's nice. If you work for the city of Miami, at least take a portion of that. People are going to be kicking themselves because I know some people will not do it, probably a lot. But holy crap, what an opportunity. Two, local fees and taxes could be paid in Bitcoin or some other cryptocurrency.

Not as exciting, I will say, spending your Bitcoin. not as exciting as getting Bitcoin. I have to do it, obviously, because I'm living on it. But, you know, number three. And finally, the city's treasury might place some of its investment capital into Bitcoin, which would be a first for major cities in the United States and perhaps the world. That's exciting because that's kind of the first, some of the first forays of governments, even though it's local, it's municipal, getting into using Bitcoin as a reserve asset.

And I think this the first inklings we're going to see of it and it'll develop over the coming years. But eventually you're going to see countries doing this. At least that's my opinion. So exciting. Now, with this shift and this kind of bullishness of Bitcoin within Miami, well, exciting. Bitcoin 2021, which I will be attending. Who's going to see me there? I hope to see a lot of you guys there.

But anyways, Bitcoin 2021 has been moved to much. Miami. They're looking at the dates of June 4th and 5th. So originally it was going to be in LA. Actually, even before that, when it was Bitcoin 2020, it was going to be San Fran. But then they obviously last year with everything shut down, they had to move the dates. They moved them. It was supposed to be April, May, end of April. It was supposed to be end of April, beginning of May in L.A. But then they just weren't confident enough that, the whole state wouldn't be shut down or that their event wouldn't be shut down. So they said,

screw it. We are leaving. We're packing up. We're going to Florida. We're going to Miami. I'm fine with that. I'm going to, maybe I'll rock like a Miami Vice kind of look when we go there.

Somebody join me. Also, myself and Stefan Lavera, we were originally going to do a karaoke night leading up to the actual event. At some point, when it was supposed to be in L.A., well, we're looking at hopefully doing that again.

regardless, I'm going to try to do it. Hopefully, Stefan can get out of his country because Australia's a little crazy right now and make it. But regardless, it's going to be fun. I really hope to see a ton of you at Bitcoin 2021. I'm so excited for it. And it's cool to see that they're starting to lock down dates.

Obviously, those aren't fully confirmed dates, but that's pretty much what they're targeting, unless something big changes. We'll see. A couple last things to touch on here. considers building a Bitcoin mining center based on nuclear power. Again, interesting seeing countries start to dive into this. We saw last week, I believe, Pakistan. One of their provinces is starting to spin up Bitcoin miners where it used to be illegal. And that's like the government

doing this. You've seen a lot with Iran. There's just been a lot of interesting stuff coming down the pipeline. So I'll read a little bit here. Ukraine's Ministry of Energy is considering building a Bitcoin mining center to utilize the country's excess nuclear power. And this is what, again, I'll interject here, but this is what Bitcoin is good at. It seeks out the cheapest and most efficient places where it can pull power. And it tends to be waste, either waste gas, like natural gas. It tends to be renewables like hydroelectric or something like this where they're just producing so much extra from their nuclear power plants that gets wasted anyways, you may as well funnel

it into the Bitcoin network and be rewarded for that extra energy. So, reading on here, officials of the ministry held a discussion last week with Ukraine's deputy energy minister for digital development, the country's state-owned nuclear energy company, and Ukraine's Ukraine's Bitcoin mining machines manufacturer, and they all wanted to move this proposal forward. Now, they did say that the center would help use Ukraine's nuclear power, increase profits, and help grow the government's tax reserves. They also said the idea of creating a data center based on nuclear power, of course, deserves attention because the Ukrainian UES or unified energy system has unused.

used base capacity. The constant load on nuclear power units could bring additional profit to the state-owned enter-go-tum. I'm not sure how to say that. And enable business to operate, which will also pay taxes to the domestic budget. Now, they said it is not clear what size the data center would be if the proposal is finalized, but according to a report from data center dynamics, it could be between 250 and 500 megawatts, and it could also go up to two to three gigawatts.

Now, for context, some biggest Chinese Bitcoin mining farms had about three gigawatts of hydropower electricity during the rainy season last year. So this puts Ukraine in a position to actually be competing tip for tat with some Chinese miners. So I love that we see kind of this decentralization of what used to be a concentration of mining hash power in China. It still does exist, but it's moving in the right direction. There's a lot of hash power that is in China or at least the mining pools based out of

there, which is a little bit different because if you're part of a mining pool, you can redirect your hash power, you're basically your computing power towards any mining pool. So yeah, there's some nuance there. But either way, very interesting to see. And I wanted to touch on one last thing, a report from Glassnote. I really like this. So they did an article here called No, Bitcoin ownership is not highly concentrated, but whales are accumulating.

And the little tag on at top, he said, they say, we analyze the distribution of Bitcoin across network participants and show that BTC ownership disperses over time and is much less concentrated than often reported. Meanwhile, BTC supply held by whales has recently increased suggesting institutional investors are entering. I love their breakdown. They have names for who owns what in terms of the amount of Bitcoin. The vast majority of people are going to be shrimps. So let's break this down. This is their designation. You're a shrimp if you have less than one Bitcoin.

You're a crab if you have one to 10 Bitcoin. You're an octopus. If you got 10 to 50. a fish 50 to 100, dolphin 100 to 500, shark 500 to 1,000, whale 1,000 to 5,000, and a humpback is over 5,000 Bitcoin. So they kind of broke it down into the distribution right now. So obviously, they kind of separated out miners and exchanges because exchanges account for a variety of different people and it's kind of difficult to decipher. And miners are minors, right? they're going to have reserves and things like that.

So it's a little bit different in terms of the economy and the impacts. Now, humpbacks, the highest account for around 13%. Wales account for around 18%. Whereas you get down to kind of the lower levels, like less than 100 Bitcoin. I don't know 100 Bitcoin is a lot, but less than 100 Bitcoin, you know, that's taken up still a good 30% of the entire allocation of Bitcoin, that's pretty good for like the lower end. It definitely isn't distributed that way on a global scale

when it comes to wealth distribution. So a quick little sidebar here in the article. It says on the large end of the spectrum, whales and humpbacks are the biggest non-exchange entities that control around 31% of Bitcoin supply. These are most likely institutions, funds, custodians, OTC desks, and other high net worth individuals. On the other hand, smaller entities holding up to 50 Bitcoin each, shrimp, crab, and octopus control almost 23% of the supply. This shows that a substantial amount of Bitcoins

are in the hands of retail investors. And they do have a couple figures here that show the supply distribution across entities over time. In particular, it becomes apparent that the relative amount of Bitcoin held by smaller entities has been growing over the course of Bitcoin's lifetime. So you can see, if you're watching on YouTube here, you can see that, you know, the vast majority initially, obviously in the hands of miners because who else was going to have them? You were basically mining if you were using Bitcoin in the beginning. And then whales at the same time. But around 2011 into 2012, that starts to drop off quite a bit and become a much smaller piece of the network. And now you're seeing kind of like this more equal wealth distribution across people of different

incomes. And so you're seeing people that just have slowly come into the space and have actually kind of carved themselves out, you know, their own little piece of Bitcoin real estate. And this is kind of what happens when you have a system where. there aren't people that can print more money and allocate it where they see fit. Because in a system like we've seen with central banks, federal reserve, wherever you are, whatever your country is, whatever your central bank is called, when they print money and they give it to people that they see fit, it drives wealthy inequality. You know, you have some small instances where maybe you get a

government check here and there. You saw that a little bit in the U.S. But in comparison to what going out to the higher ups and corporations and high net worth individuals and the way it's being funneled into the system, the percentage going to the people at the bottom versus the people at the top is way, way skewed. And that means that wealthy individuals and asset owners in a system where money can just be printed and allocated anywhere, they get richer and the poor get poorer, even if they feel like they're temporarily richer by getting a government check. In the end, they're still way worse off. So, yeah, this is kind of the result of an actual system where at the base level,

everybody is on equal footing, on even footing. You don't have that push of inequality. You actually have wealth being kind of gradually siphoned out to everybody. Whoever can provide value or whoever, is doing something that they're good at and earning an income and then saving, they're actually able to carve out a meaningful piece of that economy and save their money and their purchasing power. So really cool to see.

I recommend you guys checking out this entire article here. I will link it down below, but really good insights from GlassNode. So with that, guys, I'm going to wrap up. I hope you have had a great week so far. I'll be back again tomorrow. of course with Why Are We Bullish? I got a good panel going on tomorrow. I'm very excited for it.

Of course, if you are watching, please do hit like, subscribe, and share all those things really, really do help. Helps get this content in front of more eyeballs. Now, if you want to help out of the show in another way,

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dot me slash at BTC sessions. With that, I am out. Have yourselves a wonderful day, a wonderful evening, wherever you may be, and I will see you next time for your daily session.