BTC Sessions - BTC LIQUIDITY CRUNCH! $200K targets now conservative?

Episode Date: December 3, 2020

In the midst of record outflows from exchanges and continuous interest from major institutions, Bitcoin looks poised to have a huge year. Some analysts believe we may see a liquidity crunch like never before, making predictions of $200,000 per coin seem conservative. SUPPORT THE SHOW: LEDN Bitcoin backed loans –  get $25 free https://bit.ly/397rlLN Get Wasabi wallet for Bitcoin privacy https://wasabiwallet.io/ Cobo Vault: secure your Bitcoin! https://bit.ly/2GgMFlH BillFodl: get your wallet backups in solid steel. https://privacypros.io/ Bitrefill: use Bitcoin to purchase gift cards https://www.bitrefill.com/buy/?code=O04UMic9 LIGHTNING tips: https://tippin.me/@BTCsessions Telegram channel: https://t.me/btc_sessions

What is up, everyone? Welcome to the show. Nice little intro there. I haven't really done that countdown before, but it allows me to get my stuff together before we start rolling. Welcome to the show. I'm Ben with the BTC sessions. Today we're going to be chatting a little bit about not necessarily price predictions, but why some price predictions may have fallen short based on a liquidity crunch that we see on the horizon here. We're going to be talking about institutions, coming in and money flowing away from exchanges and why that might contribute to everybody really underestimating the coming bull market. So very excited for that. Without further ado, I am Ben with the BTC sessions, and this is your daily session. As with all of these shows that I do live, anything can happen. So please do excuse any technical difficulties. And of course, to speak to that point, I'd just like to get a quick word from a good friend Bill O'Reilly.

We'll do it live. Okay. We'll do it live. Do it live. I'll write it and we'll do it live. Fucking thing sucks. You never know. Who knows?

Anyways, guys, I'm going to bring up my screen here. Hopefully you guys are getting this. I'm going to open up the chat now, too, just so I can see everybody. I see you guys all in the chat, by the way. Thanks for being here. Of course, smash that like button while you're watching. Every time you do that, it bumps it up in and it pleases the algorithmic gods of YouTube and gets this in front of more people.

So please do check that out. Anyways, taking a look at the Bitbow.com. We're sitting around $19,368 bucks right now. For one U.S. dollar, you will get $5,100,100. and 63 sats. I don't know how long we have before that drops below 5,000. I'm guessing not super long. We are sitting at 88.39% of all Bitcoin have been mined.

And when it comes to fee estimates, if you're looking for the next block, it looks like it's a little busy right now, 142 sats per byte. If you're willing to wait an hour, around 63 should do you. And if you're looking to, if you're okay with waiting, a day or more. One sat per byte is still all good. Now, before we dive into the meat of everything

today, of course, I want to give a shout out to sponsors of the show, ledden.io. Here, you can use your Bitcoin for a few different services. They've got their Bitcoin backed loans. These have saved me on a few occasions. So if you need to get your hands on dollars, but you don't want to sell your Bitcoin because, one, that's a taxable event. And two, you're worried about having a buyback in at a higher price. This could be for you. They've all also got their Bitcoin and USD savings accounts with interest rates of up to 11.7% annually paid monthly, and they've got their B2X offering, which uses the same loan mechanism to instantly buy more Bitcoin, effectively doubling your Bitcoin on the spot.

If you want to check these guys out, link in the show notes down below. And if you click that and opt to get either of their loan offerings, they will give you $25 into your savings account right away. Up next, we've got the Kobo Vault. This is one of my regularly used hardware wallets. I use it all the time. I really love it because it's air-gapped, which means you never plug the thing into an internet-connected device,

and that keeps the keys to your money safe and offline. Now, I use the Bitcoin-only firmware. I also recommend that you do. Helps with security. Now, this thing also, of course, has a secure element. It's got open-source firmware, and it works with all my favorite wallet. So it works with Bitcoin Core and Electrum,

Wasabi on desktop, which I love, and of course, Blue Wallet on mobile. That's my go-to. So be sure to check it out. For reference, I'm using the Kobol Vault Pro, which has fingerprint scanner and rechargeable battery. If you live on Bitcoin like me, or you've just seen price go up and maybe you want to treat yourself, or you've got to get some Christmas gifts. Check out Bit refill. They have an absolute plethora of gift cards that you can pick up there.

And you actually earn sats back while spending. So you can earn some stats back and have that sit in your account. Really awesome. And they've also got a kick-ass referral program. So check them out. Bitrefill.com. There's a link in the show notes for that. And finally, new addition to the show, privacy pros,

these are the guys that make Bill Fottle. Now, what the hell is a Bill Fottle? Effectively, if you're writing down your backups on regular paper, well, you're susceptible to fire and water damage. And that can be scary as hell, especially if you need to rely on that thing. Bill Fottle helps you get your seed on solid steel so that you are effectively U-proof. So you're not going to burn the thing, you're not going to get it wet,

and you're much less likely to throw out a piece of steel than a piece of paper. So you can check them out. They also have some pretty cool security bundles. They come with Faraday bags. These block outside signals. A lot of people use them for things like passports and debit cards. and visa cards and things like that, as well as electronic devices,

which means it's also excellent for your hardware wallet. So maybe you wanna slip your cobo vault in there just to keep it extra secure from prying signals, we'll call it. Anyways, head over to privacypro.io link down below. And with that, let's dive into the news here. So I wanna start here with this article regarding price so that we can then frame the reasoning around, it through the rest of the episode. So this article here on CoinTelegraph, it's titled,

Bitcoin hitting 200K by December 2021 is now conservative. So Bitcoin hitting $300,000 is in just one year's time is, quote, not out of the question, popular statistician Willie Wu says. In a series of tweets on December 1st, Wu stated that he has never been so bullish on Bitcoin's prospects for 2021. Discussing potential price trajectory, he confirmed that he is looking at six figures by December next year. My top model suggesting 200K per Bitcoin by the end of 2021 looks conservative. 300K is not out of the question, one post read. The current market on average has paid around $7,456 for their coins. You are all geniuses. used his technical top cap metric to deliver the forecast.

Despite being what his analytics website, Wobol calls experimental, top cap has accurately matched price tops in the past. Continuing, he eyed the decreasing amount of Bitcoin held on spot exchanges, which we'll touch on in a moment, as a sign that bullish price action would be catalyzed in the coming 12 months. Quote, I've never been so bullish for 2020.

This re-accumulation phase coincides with spot market inventory depletion roughly 2x longer and deeper than the last cycle. It will send Bitcoin. Lastly, the dollar gain in Bitcoin's market cap for each dollar invested this cycle has outpaced the 2013 and 2017 bolronz, all pointing to reflexivity increasing an amplified 2013. 2021 bullish feedback loop. So what's he talking about these outflows on exchanges? And this was pointed out from Danny Scott over at Coin Corner. He tweeted out this image of the outflows of Bitcoin on exchanges. And he said, Bitcoin held at exchanges is continuing to fall like never seen before.

Long-term positions are building Bitcoin liquidity crisis incoming. So what he's talking about is typically, when you're going into a bull market or really just through most of of Bitcoin history, there has been an increase of Bitcoin on exchanges. As more is mined, people start trading it and

as people get bullish about other things, we've actually previously, like in 2016, 2017, seen a number of coins on exchanges go up because as people see price appreciation, they say, well, maybe I'll play around and trade and so on and so forth.

That's not what we're seeing this time. We are seeing people buy up Bitcoin and then get the hell off exchanges into their own private custody. So who are these people buying up the Bitcoin and holding it themselves? Well, sure, there's the long-term holders like myself and probably many of you, but there are some newcomers. And it's not retail. There are a lot of institutions looking at this right now. It has been shocking, even to me, I've been around the block and this is crazy. Some of the people that are coming out and saying that this is promising.

Black Rock, they are the largest asset manager on the planet. The head of the world's largest asset manager has provided a somewhat bullish take on the world's first cryptocurrency. According to a report by CNBC on Tuesday, CEO of BlackRock Larry Fink said Bitcoin has caught the attention of many people and that cryptocurrency market was still relatively small compared to others. Speaking to former Bank of England Governor Mark Carney at the Council on Foreign Relations on Tuesday, Fink said the nascent cryptocurrency asset class can possibly evolve into a global market asset.

According to the report, Fink said having a digital currency has a real impact on the U.S. dollar, making it less relevant on a global scale for international holders of dollar-based assets. He also raised the question, does it change the need for the dollar as a reserve currency? The comments are still a relatively rare endorsement from a major traditional financial player, but followed on the heels of even more bullish views from billionaire hedge fund managers Stanley Druckenmiller and Paul Turner Jones, who are allocating a portion of their assets to Bitcoin. BlockRock is the world's largest asset manager with over $7.4 trillion with a T dollars in assets under management, according to their website. Insane.

Now, moving on from there, we've got more. bullish news from investment giant Alliance Bernstein. They now say Bitcoin has role in investors' portfolios. So a research arm of New York-based Alliance Bernstein, a global investment manager with $631 billion in assets under management, has had a change of heart when it comes to Bitcoin as an investment. In a research note produced for clients seen by CoinDesk, Indigo Fraser Jenkins, co-head of the portfolio strategy at Bernstein Research said the firm had previously ruled out Bitcoin as an investment asset back in January of 2018, soon after Bitcoin had hit its all-time high close to 20K. But post-pandemic changes to policy environment, debt levels, and

diversification options for investors mean the asset manager has to admit that Bitcoin does have a role in asset allocation, at least over the long term. Now, they go on to cite things like the reduction in volatility for their reasoning here, but in the end, they came out and they said, ultimately, Bernstein Research recommends that Bitcoin can comprise from 1.5 to 10% of portfolios depending on the cryptocurrency's monthly returns. Yeah. Again, you have major, major institutions saying, yeah, this makes sense as part of an allocation in a portfolio. And they're recommending, you know, one and a half to 10% on this stuff, wild.

Furthermore, of course, you know, we saw PayPal recently add Bitcoin, although if you're watching this and you're like, oh, I'll go buy some Bitcoin on PayPal. Don't do that. It's not custody. It's basically an IOU. you cannot pull it into your own custody. Who knows if that will change in the future, but it's an issue.

Let's just not go down that road, much better to hold it in your own custody. But regardless, PayPal CEO and President Dan Schumann took to the stage on the first day of the major Web Summit event on Wednesday, telling an estimated 100,000 attendees that for cryptocurrency, the time is now. So they basically said interviewed by New York Times columnist Andrew Ross Sorkin for the online 2020 conference

Schumann anticipated digital currencies soon entering the mainstream and becoming an everyday payments tool. The global pandemic has accelerated various trends such as customers or consumers abandoning cash. The whole situation and lockdowns and so forth, has pulled these trends forward anywhere between three to five years and five to six months, according to Schulman. He continued, I think that you can create a financial system, a new modern technology that is faster,

that is less expensive, more efficient, that's good for bringing more people into the system for inclusion, to help drive down costs, to help drive financial health for so many people. So over the long run, I'm very bullish on digital currencies of all kinds. Now, I'm going to say that this seems a little like he hasn't done his research. I don't think he gets it still. And I mean, you can see that in that they've added it and haven't bothered to offer custody where people can actually withdraw. I don't think this guy gets it.

He's in the payments realm. And so he's, to him, every hammer, to a hammer, everything looks like a nail. And to somebody in payments, everything looks like a payments technology. And when realistically, Bitcoin was a response to poor central bank policy and the inflation of people's savings and the stealing of their time and wealth. So I don't think he quite gets that. Now, can Bitcoin evolve to that point where it's used for that? Yeah, absolutely.

But do we want to see it funneled through something like PayPal? Probably fucking not. At least not me. I'd rather use something like Lightning Network where I still retain. control over my funds, but I am able to execute those quick and cheap and easy payments. So again, to me, PayPal is kind of like a, oh, good, more eyeballs on Bitcoin, but also don't use it. That's my approach.

Anyways, moving on here. Even more, NYDIG raises $150 million for two Bitcoin investment funds. New York Digital Investment Group has raised 150 mil through two separate cryptocurrency investment funds, according to documents filed with the United States Securities and Exchange Commission on November 4th, sorry, November 24th and December 1st, the NYDIG Digital Asset Funds, number one, raised 50 mil, while the NYDIG Digital Asset Fund, 2, raised 100 mil. Reports suggest that the money raised by Fund 1, which invests purely in Bitcoin, came from just two unnamed investors. Meanwhile, the second fund is reputed to have received

its entire $100 million investment from a single investor. The new fund follows a big year for NYDIG, which announced 50 million equity growth in October through investments from commercial and investment banks, insurance firms, and asset managers. New York Digital Investment Group is a subsidiary of Stone Ridge, a $10 billion asset management giant. As Coin Telegraph reported,

Stone Ridge recently made a Bitcoin investment of its own to the tune of 10,000 Bitcoin. To date, the investment has seen gains of $75 million. I mean, what do you say to that? Like everybody, and then I'm not finished, Guggenheim says it could invest up to $530 million in Bitcoin trust as the cryptocurrency leaps to record highs. So, Guggenheim Partners is the latest Wall Street firm

to show interest in Bitcoin and a Friday regulatory filing signals the firm could make a massive investment in the soaring cryptocurrency. Guggenheim disclosed in an SEC filing published Friday that its macro opportunities fund held the right to invest up to 10% of its net asset value in grayscale Bitcoin Trust. The trust invests solely in Bitcoin, allowing its shares to serve as proxy for the popular cryptocurrency. The fund manages roughly $5.3 billion in assets, making it a 10% investment worth of around $530 million. Just a note, that's actually more than Michael Saylor and micro strategy put in, and that was unprecedented, but it would, at current date, even a few months later, buy less Bitcoin.

Super funny. Anyways, when I'm talking about all of these investors and institutions coming in, they're not leaving this shit on exchanges for the most part. Sure, you have ones like Guggenheim where they're looking at grayscale, but like micro strategy, they pulled that off. They're self-custodying that. And I think a lot of these players are looking at this as a self-sovereign store of wealth where the trust is not put on a central bank for the currency itself.

So why put the trust into custodian, especially with a finite asset that cannot be debased. They don't want the fractional reserve in a lot of instances. And so I think you're seeing a lot of that happening with exchanges right now. You're seeing these outflows. And when push comes to shove and people want to buy, there's not going to be the supply that people once had in the previous bull markets, which could make insane moves when it comes to.

the upside. And it could also make for a less shallow or a less deep, some less deep trenches into the next bear market after a bull run. And why that is is because a lot of these institutions, they're not buying it to flip it later, like later this year. They're not buying it to like pay off a mortgage or buy a nice car. They're buying it to hold on treasury for years and years to come. So I think that's, I don't know about you guys, but this time feels very, very different in terms of who's here. And I know a lot of people say, oh, Bitcoin's being co-opted by this.

I don't think so. I think it's people that have an interest in keeping their wealth, cluing into this and realizing, hey, I can conserve some human capital and actually put it into something that stores it and potentially appreciates as opposed to, disintegrates over time as more is printed. And I think there's going to be a big push for individuals, institutions, and eventually nation states and central banks to get their hands on some.

Will that be this epoch? I don't know. Anyways, outside of the institutional front here, I wanted to touch on a couple quick things. Bitmain reportedly cuts off funding to Bitcoin core developers. So those of you unsure who Bitmain is this is, they create a lot of the ASIC minor chips and they do a lot of mining in themselves. Now, they are, again, one of the largest Bitcoin miner producers in the world.

They kind of came out of favor in 2017 when they pushed back against an upgrade that is now present on Bitcoin called Segwit. Segwit enables for more throughput of more transactions per second and also fixed a malleability bug in the protocol. So it was kind of a no-brainer. And that capacity increase that came with it was not what was indeed backwards compatible, meaning you didn't have to hard fork and force everybody to upgrade, which would set a bad precedent. Anyways, they have continued to fund some Bitcoin developers. However, Bitmain reportedly halted its funding for some primary developers maintaining Bitcoin-related software.

Jonas Schnelli, a major Bitcoin core contributor and maintainer, claimed that Bitmain halted its support after funding his efforts for more than three years. On December 1st, he tweeted that he lost his sponsorship from Bitmain alongside Joe. I hope I'm saying, Joe Barbosa, another Bitcoin Core contributor, also known as the ProMag nickname on GitHub. Thanks to Bitmain for all the help, despite. the disagreement we had, Schnelly tweeted, asking the crypto community to contribute to his further efforts on Bitcoin Core. Now, this is a bit of a negative story. You know, BinMain can do whatever it wants with its funds, but on the positive front, we did touch recently on Brink, which was

started up by a couple hardcore bit corners, and it's a fund to help basically fund development. So digital asset exchange Cracken has now donated 150 grand to Brink the R&D Center for Bitcoin developers. A little bit into this article here. It says U.S.B. Crypto Exchange Cracken has reportedly agreed to donate $150,000 to Brink, which is a research and development center that's focused on educating the next generation of Bitcoin developers. Established by ChainCode Labs developer John Newberry and Bitcoin Optech contributor Mike Schmidt. Brink aims to sustainably fund open source application developers working on the Bitcoin Protocol. The Brink Initiative also intends to bring new software engineers to the project,

which is today supported mainly by volunteers. So for every positive or for every negative, I guess on the inverse, there is a positive, and it's nice to see more things like this popping up. Now, on the news of so, or in the vein of, Self-custody is the best route. Australian crypto exchange exposes personal data of 270,000 users. Now, it's important to note that no coins were lost here, but data breaches are a big deal. So, BTC Markets is one of Australia's biggest cryptocurrency exchanges.

It has accidentally exposed users' personal data, raising the risk of fishing attacks. As reported by Business Insider Australia on Wednesday, the exchange revealed the name and email addresses of over 270,000 users when it sent out mass emails. The error saw names and addresses placed in the two section rather than individually addressing each recipient or using blind carbon copy. This isn't the first time we've seen this. Another exchange did this before. The emails were sent out in batches of 1,000 recipients and meaning the exposure to the

bad actor was limited to the data of around. 999 individuals per email. So again, this isn't great. The reason why this is dangerous is because for the most part, people lose their coins from either user error or phishing attacks. And this is where somebody tries to get you to give them information that you should not be disclosing. Things like the private keys, your seed phrase, or login credentials.

They pose as somebody else and email you, and they know that you have Bitcoin or other currencies, and so you become a prime target. So, yeah, again, not great. And we could see it much later. We saw Ledger accidentally lose some of their customer data, and we saw months later Ledger fishing attacks still happening as of now, random emails coming out saying,

oh, yeah, you got to put in your seed phrase here. And some people falling for it, unfortunately. So as with everything, be careful. The only way to really mitigate this kind of risk is to have a burner email address where you don't, you know, that's not your regular email address. But it's tough. It's tough. Now, I think I'm going to start doing this every week for the news. I'm going to have a Bitcoin book suggestion.

And this week, I would like to suggest Bitcoin billionaires. So this is the story of the Winkleweigh or the Winklewoss twins. and it's actually the sequel to a book called Accidental Billionaires, which was turned into the movie, The Social Network about Mark Zuckerberg and Facebook. And so this follows the Winglewoss Wins after that whole ordeal, them finding out about Bitcoin, understanding it, and it's really interesting because I've met some of the people in the book

and I'm reading this documenting, and I've spoken to Eric Borges and some others. And yeah, interesting to hear the early, stories of what happened there and really, really cool. And I hope that this is a movie. I don't know if they would get this movie out before the end of the bull run, but it would be really cool to see that happen, especially with good

timing. But hey, check it out, Bitcoin billionaires. Really enjoyed it. I read it a while back. And last thing I wanted to let you guys know is I was on the radio today, just local radio. Fun though. I've been on the Danielle Smith show a number of times before.

She's an enthusiast, her And I went on to just chat about Bitcoin. We're getting close to all time highs again. And people are curious. So I had a nice little chat with her and kind of gave some fundamental knowledge, hopefully, to their audience. Be sure to check it out. I'll link it down below. Or you can just head over to global news.ca.

Search for Daniel Smith. And there is a segment there. And I tweeted it out on my Twitter too. So you can check that out. Anyways, with that, I can start wrapping up here. up here. Again, everybody in the chat and everybody watching, there's like 130 people here right now. Thank you so much for watching and or listening. If you want to help with the show, you can hit like, subscribe, and share. All of those things actually really do help. So if you're in here,

hit that like button, give this a share so people can see it. If you want to help with the show in another way, you can hit up the sponsors I mentioned before. That was Ledon, Cobo, Bit Bit Refill, and of course, Privacy Pro slash the Bill Fottle. That's all linked down below. If you really liked what you saw, you can always hit up me with a Bitcoin Lightning Network tip at my Tippin.me page. That is t-I-p-p-in.m-n dot me slash at BTC sessions. And with that, I'm going to wrap up. Thank you guys so much again. And I will see you next time for your daily session.