BTC Sessions - CNN Warns Against Bank Runs, Bitcoin’s Rebound, Italian Bank Adds BTC Wallet EP031

Starting point is 00:00:01 Wasabi wallet. I'm fairly private. What's up everyone? I'm Ben with the BTC sessions and this is your daily session. Before we dive in, of course, shout out to sponsors of the show, ledden.com. This is where you can use your Bitcoin for a few different services. They've got Bitcoin savings accounts where you can earn interest on your Bitcoin. They've got Bitcoin back loans, which were actually the first service of theirs that I utilized. this is where you can use your Bitcoin as collateral for a Canadian or US dollar loan. So if you're in a pinch like I was around this time last year, and you need to get your hands on dollar is you can use your Bitcoin as collateral, secure a loan. That Bitcoin will sit in a dedicated address that you can audit 24-7, and then upon

Starting point is 00:00:55 repayment of the loan, you will get all of your Bitcoin back. So that definitely helped me because it was a time where I didn't really want to sell my Bitcoin because I was worried I wouldn't be able to buy it back at the same price. And that ended up actually being the case had I sold. It wouldn't have been great. So anyways, that is something that definitely helped me. And they've also got their B2X offering. So for you Bitcoin bulls out there, this gets you a Bitcoin loan by using your Bitcoin

Starting point is 00:01:25 as collateral, using the dollars obtained to immediately buy more Bitcoin, essentially doubling your Bitcoin on the spot and giving you access. to experience those price fluctuations that comes with it. So if you want to check them out, there's a link in the show notes down below. And if you opt to use that link and get a Bitcoin back loan, they'll actually credit you with an additional 50 bucks or the Bitcoin into your account.

Starting point is 00:01:50 And secondly, we have Paxful. This is an online peer-to-peer Bitcoin marketplace where you can buy and or sell Bitcoin. So this is particularly useful for those of you that need various different, payment methods because these guys have well over 300 of them. Yes, 300 different payment methods. They've got things like bank transfers and intract online, intract e transfers. They've got popular payment apps like PayPal and what's the one I'm looking for, cash app. And then they've also got

Starting point is 00:02:25 other ways to buy Bitcoin like using gift cards to do so. Now on the flip side of this, if you want, You can also set yourself up as a merchant and make money buying and selling Bitcoin, making quite a bit of coin off of the spread there. They've also got a killer affiliate program. And if you're looking for some cheap gift cards bought with Bitcoin, I don't think I've seen a better place. I've seen things like Amazon and Starbucks and Walmart cards on here for 20, 30, 40% off in some cases. So they're definitely a steal in some instances. So be sure to check them.

Starting point is 00:03:02 out, there is a link in the show notes down below. It's pactsful.com. And with that, let's dive into the news. So, panic continues across the globe with a lot of crazy stuff going on. But I wanted to highlight this article from CNN about the title of the article is called Do Not, and Not is all in caps, take a bunch of cash out of the bank, because of coronavirus. And I'm actually going to read, I think I'm going to read most of this article to you because it is, it just sounds very guarded and it almost reads like a little bit of propaganda, propping up the current system and saying you don't need to worry.

Starting point is 00:03:51 And if there's anything that we've learned in the last little bit, the media has had some pretty fantastically bad takes on advice over the past few months here, as we're all learning now. So let me just dive in here. It says, yes, these are scary times, but that doesn't mean you should head to the bank, drain your accounts, and put cash under your mattress. Bank deposits are insured by the Federal Deposit Insurance Corp, and the FDIC has some helpful guidelines on its website to answer questions consumers may have now. First, informer. the FDIC points out that any deposits with a bank will continue to be protected up to at least $250,000. European countries operate similar deposit guarantees, although the maximum insured

Starting point is 00:04:41 amounts differ. The safest place for your money is inside a bank. Banks will continue to ensure their customers have access to their funds either directly or electronically, the FDIC said. The FDIC office of the comptroller of the currency and Federal Reserve also reminded Americans in a news release Monday that banks are being encouraged to use the Fed's so-called discount window to take out short-term loans if they need them. The Fed, which essentially America, which is essentially America's bank for the banking system itself, can provide emergency funding to financial institutions in times of crisis. It also has slash interest rates to zero and dusted off several other financial programs from 2008 to ensure that banks have the

Starting point is 00:05:28 funds they need. Banks are, big banks are extremely well capitalized. That may not be necessary referring to the financial programs from 2008, but that may not be necessary, especially for the largest banks. The Fed noted in a release on Sunday that the big financial institutions have 1.3 trillion in common equity and hold 2.9 trillion in high liquid, highly liquid assets on their balance sheets. This means that the top banks have substantial levels of capital and liquidity in excess of regulatory minimums and buffers, according to the Fed. In other words, there is no need for people to take out big lumps of money from their banks. Your deposits are safe. The banking sector is so much better capitalized right now than it was during the 2008 financial crisis. Regulations have only

Starting point is 00:06:24 benefited them. Liquidity is there. And Matt Daly said Matt Daly, head of corporate municipal teams at Conig, an asset management firm. The crisis feels a lot different from 2008. That was a true challenge to the plumbing of the financial system. We don't have that now. It goes on to say that there have been reports where people have run to the nearest ATM trying to get out their hands on 20s and hundreds, and that has caused some issues. I'm going to read another little snippet here. Another good sign? Large banks, as well as many smaller regional banks, have all agreed to temporarily suspend

Starting point is 00:07:11 stock buyback programs in order to ensure they have the capital they need for loans and daily operations. Aw, how nice of those banks to suspend buyback operations of their own stocks with the money that they got bailed out with back in the 2008 and 2009 financial crisis. How nice of them. And then this final quote down here, the whole point of the Fed's bazooka fires over the last couple of days is to stabilize the system. The Fed is the lender of last resort, said David Banshan, chief investment officer with Bansion Group. I don't have any worries about the broader banking system. Access to dollars will not be an issue.

Starting point is 00:07:55 I don't know about you guys, but this whole article just really rubs me the wrong way. The whole thing reads like a please, please don't panic kind of thing, like a propaganda piece put out there to say, please don't take out money. Yeah, and anyways, this isn't the only concerning things with the banks right now. You also have this article here. The Bank of England cancels stress test for UK banks. And it asked, are they too afraid to fail? So the Bank of England and Prudential Regulatory Authority canceled the 2020 stress tests of eight major British banks and building societies,

Starting point is 00:08:41 citing the emergency situation amid the coronavirus outbreak. This is another example of how governments are supporting the banking systems while the crypto market is on its own. Yeah, I mean, that's how it was designed, right? Bitcoin was designed to not need any outside influence to come in and do anything. It's just going to function as it functions. And that's just the way it is. And the economy will have to work around that so that, yes, in times of downturn, it hurts, but it's shorter lived. Whereas this, the way that the current system is set up is you can kick the can down the road basically as long as you like, but when it finally does blow up, it's catastrophic. And we're kind of seeing the hints of that

Starting point is 00:09:27 right now. This quote here was really funny to me. They said, where is the, okay, there we go. In light of the EU's decision, British banks required the Bank of England to ignore its test, with executives saying that it would be stupid to run a stress test during a stress. Let's concentrate on this situation rather than a hypothetical one. I think the issue here is that they're worried that in the midst of this, if things get worse and they try to map that out with a stress test, that the stress test will not hold up. The other thing is that they're trying to lift a newly introduced accounting rule called IFRS9,

Starting point is 00:10:19 which requires banks to book bad loans before the losses are actually incurred, in which case right now there's a lot more bad loans given the state of the economy. Now, the last time that they were tested was last year, and they said that last year showed that British banks were resilient. However, the last year's test showed that the situation was already deteriorating at the banks. So the Bank of England's report in 2019 reads, losses on corporate exposures are higher than in previous tests, reflecting some deterioration in asset quality and a more severe global scenario. Despite this, and weakness in banks underlying profitability, which reduces their ability to offset losses with earnings, all seven participating banks and building societies remained above their hurdle rates.

Starting point is 00:11:16 Now, whether or not that would remain true this year, I guess will not be seen because they're not doing the tests in the first place. So the test may just come in the form of the cluster fuck of an economy that we're about to get with everything shut down right now. Now, in the face of all this panic in the banking sector, you also have, um, Senator Loughler, she is the former CEO of BACT and the current Republican senator from Georgia. She sold millions of stock within days of a Senate Health Committee hearing on the coronavirus. According to her report from Daily Beast on March 20th, the Republican Senator reported the first instance of stock jointly owned by her husband on January 24. fourth, the same day of the private briefing to United States senators. And you might be saying, well, so what, she sold stock that she owned based on the information that she had. The thing is,

Starting point is 00:12:21 it was a closed door meeting, which was not accessible to the public, which gave her an unfair advantage. And she sold in response to that. Now, if she did indeed sell in response to that meeting, then it would possibly fall under the... the realm of under the umbrella of insider trading. So she dismissed it. She said this is a ridiculous and baseless attack. I do not make investment decisions for my portfolio. Investment decisions are made by multiple third-party advisors without my or my husband's knowledge or involvement. Now, the thing about that is, is that literally it started happening the day of that meeting. that she had about the coronavirus and what was likely to come from it.

Starting point is 00:13:15 And not only that, but it also included buying some stock. And what did she buy? Well, she was buying. Let me just find it here. It's a company called, if I can find it here, sorry, it's just a little lost on me. It's a company that's based very much on working from home and being able to distribute workplace solutions. Here it is. So during the same period, only two stock purchases were made by the Loeffler's, comprising investments between $100,000 and $250,000 into Citrix, a company that provides technologies for distributed workplace solutions.

Starting point is 00:14:03 Citrix website states that the company is committed to providing the company. the support you need to keep your employees safe and operations running throughout the COVID-19 pandemic. So essentially, it was a company that was positioning itself to try and make money by offering services that could help during a pandemic. And everything else was sold off. There was somebody tweeting out after her saying, cool, cool, I'm sure the 250K of stock you bought in the company that makes software to allow people to work from home was just a crazy. coincidence. The other interesting thing about this is we even have videos on her Twitter from as recently as March 10th where she's saying that the economy is strong and that you shouldn't be worried about that and you should just take simple precautions like, you know, social distancing

Starting point is 00:14:56 and washing your hands. But again, reaffirming everybody that the economy and that the workers are strong and this will be fine. Meanwhile, in the background, she's, She's selling off all of her stocks and buying stock in a company that will be a work-from-home solution. So clearly what she believes in her mind and what she's doing in practice are completely divergent. Now, moving on to what Bitcoin has been up to, there's been quite a rebound off of the lows that we saw from the dump and the panic on Friday the 13th and beyond. So we saw lows of around 4K and we're up significantly from that. Now, Ralph Paul is, he is the CEO of, here we go, CEO of Global Macro Investor.

Starting point is 00:15:54 And he tweeted just yesterday, he said, I cannot express how bullish I am on Bitcoin. We are at risk of losing the entire system right now. I know what they will find a way to see. save it, but all trust is lost. He also tweeted earlier that he was only sitting in dollars and Bitcoin from this point out. Now, when we look at the Bitcoin chart, again, we had that low, the absolute low from the huge dump was down to 4K from about 8 in a matter of a day or so, a couple days. We are now up and around the $6,400,000.

Starting point is 00:16:36 mark. We did get overnight, and I was surprised to wake up and see this, but overnight, we were pretty much right in around $7,000. So quite a bounce back from the 4K range. Now, stocks, on the other hand, and let me refresh, so I'm kind of looking at current numbers, stocks are notably not doing that. Yesterday, there were some mild gain. In fact, I think we even ended the day down. a little bit. But stocks have been kind of hanging around the same level with some mild losses, you know, 1% or less than a percent, depending. Like the Dow right now is down about 100 points, which is half a percent. S&P is down about 21 points, which is not even quite 1%. But again, notably divergent from how Bitcoin has been performing since it hit its low, you know,

Starting point is 00:17:32 coming up to damn near 7K. Now, it's important. to note that we're by far not out of the woods when it comes to Bitcoin price. It's just that it's no longer following equities markets as it was as as investors across the board were selling everything, right? We saw gold dump. We saw equities dump. We saw just about everything that could dump, dump, including Bitcoin. But now Bitcoin seems to be making these impressive kind of jumps up at the chart, whereas not really anything else is doing that. So while it did follow the mass of sell-offs, everything else, it seems to not be doing that, at least for the moment.

Starting point is 00:18:16 And I got to say, you know what, the other day I did a video and I just, I used the word decouples. And I don't know what the hell triggered some people, but some people were super pissed about I mean, I guess one of them was on Reddit. But anyways, and then there's another dude on Twitter that was super mad about that word. I don't get the anger about this. Like, everything was selling off, right? So there was mass panic across anybody holding anything other than just dollars. And so, yes, everything was kind of coupled together because everything was selling.

Starting point is 00:18:57 and now Bitcoin seems to be the loan outlier that is no longer selling off and seems to be gaining some. So would that not be considered as decoupling from the last week of everything being sold? Anyways, I don't know if the word decoupled or decoubles triggers you, but I'm simply meaning that while where once before everything else was being sold along with Bitcoin, Now Bitcoin seems to not be doing that. So if you're angry, I'm sorry for hurting your feelings. Anyways, we are, while we've seen significant gains from the bottom or potential bottom, we should be aware that, you know, we just need to keep open the possibility that it could be a bear trap.

Starting point is 00:19:52 Maybe, maybe, maybe. So be careful still. we had some people saying that in order to really feel bullish a couple traders are agreeing that agreeing that seeing a price steadily above 6,400 and some of the longer timeframes like the four hour or the one day might be a little bit more confidence inducing. But hey, we will see. the one thing I did want to bring up was that FundStrat, an analyst from Fundstrat, not Tom Lee, if you're familiar with him, but anyways, regardless, one of the guys from FundStrat, they said, technicals behind Bitcoin Price are not in good shape as per FundStrat's report published yesterday, though the cryptocurrency has surged over 13% since then. Nevertheless, the oldest cryptocurrency is still down 36% from its February peak of 10%. thousand three hundred. The recent crash triggered a steep decline in traditional markets cause

Starting point is 00:20:58 Bitcoin to break below its five-year uptrend. Fundstra's technical analyst Rob Slomer, I'm not sure how to say the last name, says the price action has been badly compromised. For now, technically, we will again give Bitcoin the benefit of the doubt that it is attempting to bottom, but recognize Bitcoin will likely need months of consolidation to repair the technical damage now in place. The reason I bring up this article here is because of how hilariously bad all of FundStrat's calls on everything have been for the past few years. You know, you always see Tom Lee, and maybe it's just Tom Lee, but I always associate him directly with Funstrat because he is involved with him. But his calls on Bitcoin price have just been so.

Starting point is 00:21:52 so consistently awful to both directions. You know, he's been, he was insanely bullish all the way through the bear market. Consistently, like at the beginning of 2018, he was calling for something like 50K by the end of the year, even, and even like into the summer he was saying that. And it's just the absolute opposite. And then he's, you know, he's had a few bearish calls where it goes in the opposite direction. So in my eyes, seeing anybody from FundStrat, seeing something about the Bitcoin price, I consider it a contrarian indicator, but, you know, make your own decisions there. I wanted to touch on one other thing, and that is an Italian bank released a Bitcoin wallet in the midst of the coronavirus outbreak.

Starting point is 00:22:44 So even though a lot of stuff is happening and a lot of things are shutting down, this company opted to launch this feature. So this is from Hype. It's a Challenger Bank, which a Challenger Bank is essentially an online-only bank account that goes to challenge the typical brick-and-mortar type stores. So Hype has a million customers, and they just did what is the equivalent of jamming something like a Coinbase app into a bank account. They paired up with a crypto company called Koneo, or, coinio, I'm not sure how to say it, but conio, I believe. And so now they're offering the ability to buy and sell and send and move around Bitcoin. The nice thing about this too, in comparison to some banking apps where you just get exposure to the price fluctuations, but you don't have

Starting point is 00:23:39 any actual control over your coins. This is actually your own wallet and you do have a private key and is done kind of like a multi-sig setup. So essentially what happens is you have your wallet in this banking app. When you buy Bitcoin, it goes into your own wallet with its own private key. You have one of three keys. One is held by hype. The other is held by Conio. And it's important to know that Conio is not controlled by the bank and vice versa. So, essentially if one of those companies reneges on on the deal to be the second signer then you can go to the other the threat model i would see here is if the the crypto company and the bank were to go into cahoots then they would have the two out of three multi-sig necessary to move the funds as well so

Starting point is 00:24:37 sweeping regulation uh that would be you know anything from making it illegal to just um confiscation, that could be a threat model here. So, you know, ideally, if you bought on this app, you could send it out to your own private, fully private Bitcoin wallet. But at least there's a level of custodian chip paired with a level of your own self-custody here, as opposed to just straight up, not giving you any access to the Bitcoin. So anyways, they launched this. They've got a fair number of customers. And I mean, we'll see if this strategy of launching in the midst of this panic pays off. But it's cool to see that even with the craziness, Bitcoin and these crypto companies and Bitcoin companies keep on just working through the madness. And again, Bitcoin never sleeps as opposed

Starting point is 00:25:40 to traditional markets. So cool to see. Anyways, guys, I'm going to wrap it up there. Thank you so much for watching. As always, please do hit like, subscribe, and share. And if you're listening to this audio only on the podcast, of course, shared on your social media and be sure to leave a rating that definitely helps with visibility. Now, if you want to help the show in another way, you can hit either of the sponsors down below that was leaden and packsful, as well as wasabi wallet that can help you with your Bitcoin privacy. And finally, if you really like what you saw, you can drop me a Bitcoin Lightning Network tip at my Tipin.combe page that is tippin.combe slash at BTC Sessions. And with that, I am out. Have a wonderful rest of your evening and I will see you

Starting point is 00:26:26 next time for your daily session.

BTC Sessions - CNN Warns Against Bank Runs, Bitcoin’s Rebound, Italian Bank Adds BTC Wallet EP031

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.