BTC Sessions - Coronavirus tanks stocks but Bitcoin up, NYC power plant is mining, India embraces BTC EP026

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 into the news, of course, shout out to sponsors of the show, Paxful.com. If you're in a crunch and you can't find an easy way to get your hands on Bitcoin, then this could be an excellent solution for you. Now, there are over 300 different payment methods on Paxful. Yes, you were that right, 300 different payment methods. So if you're looking for an unconventional way to pay for Bitcoin and you want to do it peer to peer to peer with somebody to make sure nothing goes wrong in between, then you have Paxful. It's also an excellent way to make a little bit of extra money if you're looking to sell some Bitcoin.

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Starting point is 00:01:29 onboarding new users to Bitcoin. So the way it works is you pick it up at a store near you. You can gift it to anybody. And on the back of the card, your friend or family member will be instructed to download a paired app and scratch and scan a code on the back of the card. At this point, it creates them a brand new Bitcoin wallet and then sends them an on-chain transaction for the face value of the card. It is super easy, super idiot proof.

Starting point is 00:01:52 So if you want to check them out, head torisewollet.com. You can click on locations in the top right to see where you can pick some up. Now, it's only Canada at the moment, but they are looking at expanding, so keep an eye on them. And with that, let's dive into the news. So, Max Kaiser, no stranger to saying somewhat controversial things, even though some people may not find this super controversial. The other day on the Kaiser report, he said that coronavirus is going to send the Bitcoin price to $100,000 in 2020. Now, I think he may be a little aggressive here, and the reasoning may not, well, the reasoning may not all be there, but hey, it's bullish.

Starting point is 00:02:40 There's no denying that. So he said, now Bitcoin will experience part two of the global financial crisis. It's already close to $10,000 a coin. This is the global financial crisis that will catapult the price to $100,000. and beyond. So what he's talking about here as far as part two of the global financial crisis was back in 2008, that financial crisis was essentially what spawned the creation of Bitcoin, or that's what Bitcoin was born into. So it was born into a crisis like the one that we are potentially seeing now. And with coronavirus and kind of the worldwide uncertainty that's

Starting point is 00:03:25 taking place right now, stocks are kind of in a tizzy. They've been dropping pretty solidly for the past week and a half, two weeks. I mean, even today, they're down. I mean, the Dow dropped 969 points on the day. So it was down just over 3.5%. You saw the S&P down around 3.5%. The NASDAG down around 3%. So that's just compound compounding on the the losses that were taken all of last week and we did have an update earlier this week but that was pretty much reversed here and so a lot of people have been pointing to hey is it was because earlier bitcoin was dropping with stocks and now it's going the opposite direction it's we've had a little bit of an update we're up about 4% today I believe at the time of recording this video anyway.

Starting point is 00:04:22 So, you know, there were people saying, hey, Bitcoin is no longer a safe haven asset. It's dropping with stocks. So it's a risk, you know, a risk on or risk off asset, depending on what they were trying to spin their narrative as. And, oh, it's no longer uncorrelated from stocks. It's going to follow them. And if people want risk, they're going to buy stocks and they're going to buy Bitcoin. And if they don't want risk, they'll get out of everything altogether. as we're seeing today, again, not really the case.

Starting point is 00:04:51 Bitcoin's going the opposite direction. And so, you know, and we see people like Peter Schiff, obviously, you know, Peter Schiff's super incentivized to be pro-gold, but he was calling out Bitcoin for not rising in the face of the rate cut from the Fed the other day, the emergency rate cut of 50 basis points. Well, now it's rising 4%. And actually that tweet was perfectly on cue because shortly after that, it started rising. And, you know, within 24 hours of that, up 4%. And so what we're really seeing is just Bitcoin is uncorrelated as fuck.

Starting point is 00:05:30 It does whatever it wants, whenever it wants. And you can't really bank on it following any of the other markets, which can be an incredibly positive thing if you actually want something uncorrelated to other markets. if you want something that is not dependent on anything else. It has its own monetary policies, its own ebbs and flows. And yes, it's still volatile and crazy. But, you know, we're kind of seeing it's not specifically tied to anything. Now, to add to the bullishness, and this is not to make light of coronavirus, obviously, you know, Max Kaiser bringing it into the fray. But you have Plan B.

Starting point is 00:06:10 So Plan B has put together a model called Stock to Flow. And it's very, very, if you go back at any point with the data points, even with limited amount of data points from the first year, you could have projected out Bitcoin's price trajectory over the following nine to ten years. And so if that model holds up, then we may be actually seeing those price points of around $100,000 in the next couple of years. So by 2022 is what the creator of this model, Plan B, is saying. And he's saying that in response to a lot of people, but there was a Twitter user who was quizzing him on this year's potential gains. And he was saying that while the rise was more gradual in after the 2016 having, and then after the 2012 having.

Starting point is 00:07:06 And he said, it's never. necessary, you should consider, is 2020 going to follow that and be even more gradual? And so plan B replied saying that in my opinion, that's not the right question to ask, because you can't tell from only two events. He said the key thing that you need to know from co-integration, 100 plus events, is that Bitcoin will probably go to over $100,000 before December of 2021. How slower or how slower or how slower. or lower or faster or steeper and exactly when is totally irrelevant.

Starting point is 00:07:43 So he's trying to say like don't focus week to week month the month. Look over the next few years over what the trajectory is. And if that co-integration holds up and the model holds up, then the average price over the next four years is going to be in and around that $100,000 mark. It will ebb and flow from that. It could overshoot it. It can undercut it in bare markets. but it will return to that mean for the next four years.

Starting point is 00:08:12 And again, this is still up in the air. We don't know if the model is going to hold, but if it does, then that can be basically what we're going to see. So very interesting to see. The other thing about this article here on CoinTelegraph that I'm pulling from here is the one thing that worries me is Tone Vase is getting bullish. Now, Tone Vase is a derivative trader, and he's traditionally not bearish.

Starting point is 00:08:39 He's bullish long term, but he's pretty conservative, and he has in the past very much overestimated how much Bitcoin would dip through the bear markets. And for a while, he was saying that this bear market, we were going to see $1,500 or $1,000. But now that we're above $9,000, he's saying it's a pretty bullish sign that another pre-having pump is very likely. And the thing that worries me here is whenever too many people get too bullish, then we tend to hit a little bit of a pullback. Now, will this happen here? I don't know. I don't know.

Starting point is 00:09:22 It's way too confusing to try and pull those guesses. I mean, I'll say that Peter Schiff is a pretty good contrarian indicator. But, yeah, it's tough to tell. You tell me, do you think that Tone Bayes being bullish is actually bearish? I don't know. Okay, let's move on here. This article out of Bloomberg is an interesting one. So there is a power plant in New York's Finger Lakes region that has set up its own Bitcoin mining operation,

Starting point is 00:09:57 and it uses the electricity it produces to generate about $50,000 worth of Bitcoin every day. So they're called Atlas Holdings LLC, their private equity firm that runs this operation. They've installed around 7,000 crypto mining machines, well, just Bitcoin A6 is what they've installed, at their Green Ridge Generation plant in recent months, and it can mine around 5.5 Bitcoin per day. So it's a 65,000 square foot facility in Dresden, New York. it was built in 1937 as a coal plant and later converted to natural gas. And so to me, it's no surprise that there's a natural gas plant that is essentially finding inefficiencies in power and able to capitalize on those and funnel that energy into mining

Starting point is 00:10:51 Bitcoin because that is happening here in my home province of Alberta and Canada. there's a lot of natural gas wells that typically would just be flaring or burning the natural gas or just venting it into the atmosphere, which is terrible. And instead of doing that, they're able to capture that waste energy and funnel it into Bitcoin mining and turn what would be a total loss or potentially a negative based on carbon tax emissions and turn it into a positive where they're actually making a profit on it and making the operation as a whole much more profitable. So the machines work in this particular, at this New York facility, the machines work off so-called behind the meter power, which makes it extremely low cost.

Starting point is 00:11:37 And so it's obviously very energy-intensive to mine Bitcoin, but if something is, if energy is just going to a total waste, then it makes sense to utilize it to make a profit here. Now, a lot of people had very strong opinions about this story in one direction. or the other. Obviously, Bitcoiners are saying, hey, great, Bitcoin mining is seeking out the most efficient power on the market. That makes sense because, you know, you have a little bit more of a deeper knowledge of how these things work when you've been around the industry for a bit longer. However, people that may not understand that will have different views. And so we have Christopher Mims, who is actually a writer at Wall Street Journal. And so he tweeted, natural gas power plant using 14 megawatts a day to mine Bitcoin in upstate New York, that's enough power for 11,000 homes.

Starting point is 00:12:29 Is this really the best use of fossil fuels that were probably fracked out of the ground? And I like how he said, probably, and he's not actually pulling real data from there. And so he said, is this really the best use? And so that alludes to the idea that there are better uses for this, that there's an opportunity. cost to mining this Bitcoin, that it could have been used elsewhere. And so that begs the question, why is nobody using this electricity? It's because there is no current use for it, whether it be, there's nobody nearby that needs to pull it and actually utilize it, or the cost of transporting it outweighs the money that would come in. So one of the better responses

Starting point is 00:13:21 that I saw here was actually from Savedina Moose, author of the Bitcoin Standard, and he tweeted back, if there are better uses, why are they not outbidding Bitcoin miners for this fuel? Answer this question for a chance to win an understanding of markets and Bitcoin. Again, like, I don't think that this guy is really considering what's happening here. And again, another excellent response to this was Guy Swan, the crypto economy, He does a podcast. Anyways, he retweeted this guy's tweet and he said, I can't decide if he even understood the article.

Starting point is 00:13:57 It explicitly says it allows them to utilize energy all year instead of shutting down between peaks, enabling them to transition from coal to natural gas. And again, it was originally built as a coal mining facility and then converted to natural gas, but it only is able to run during specific times of the year. But it was enabled to be run all year round now that they can actually utilize it to do some Bitcoin mining. And thus, that extra power can then be diverted elsewhere if it needs to be used. And so he said, would you prefer it to be coal? Bitcoin is a huge subsidy to stop energy waste.

Starting point is 00:14:48 And that's exactly what it is. A lot of people don't realize that when it comes to energy, when it comes to power plants, these power plants need to be creating enough energy for the peaks in demand, for the absolute peaks in demand. That way you don't have blackouts. So you need to overestimate how much energy you require and constantly be at that level so that if there is a peak, you don't have blackouts in the cities. And anything that isn't utilized, it's very difficult to get.

Starting point is 00:15:20 that out to other areas, it's likely just going to be waste energy. And so if you can capture that waste energy that's naturally going to occur no matter what if you don't want blackouts and utilize it to secure the Bitcoin network, then again, you just don't have the waste anymore. It's energy that would have been created anyways now going to use. So a lot of people don't really pay attention to that if it doesn't fit the narrative that they want to sell. So let's move on here. India is back in the race, according to Coin Telegraph. So there was a decision from the Supreme Court. So the Supreme Court of India passed a judgment nullifying the banking ban imposed by the Reserve Bank of India on the country's local digital currency market. So this

Starting point is 00:16:13 three-judge bench presiding over the matter, they stated in a joint verdict that the ban which was used as a precautionary measure by the RBI, the Royal Reserve Bank of India, in order to protect the nation's economy, had not been substantiated by any hard facts. So back in April 2018, the Reserve Bank of India issued an order basically asking the nation's various banks and other financial intermediaries to stop their monetary dealings with any crypto-related businesses. And in turn, we saw a lot of Indian exchanges essentially shut down. And India, for a time, Bitcoin traded at quite a premium there because it was difficult to attain

Starting point is 00:17:01 because there were no easy on and off-ramps there. Well, this opens it back up, and I've already seen on Twitter, I can't recall the name of the place, but one of the exchanges is back up and ready for business already. So kind of cool to see how these decisions. these snap decisions that happened previously are starting to be reverted. Another thing that we saw in relation to countries basically coming around saying like, hey, we're not going to get rid of this stuff. We may as well figure out easy ways to regulate it and kind of put forward the guys that we have any sort of control because realistically they don't. People want to use this. They will. And

Starting point is 00:17:42 people did use it in India regardless of the ban. So South Korea has now legalized cryptocurrency trading. So this is more just a kind of a stamp of approval more than anything. They've been mulling around trying to figure out regulation for some time now. So this new law, these laws will come into effect in about 12 months from the signing date with a further six-month grace period for exchanges to comply with the new regulatory paradigm. So around September of 2021, all exchanges and wallet providers in South Korea will need to abide by the same laws. And so the businesses essentially must comply with the same reporting requirements as other financial institutions. So more or less, it's just saying like, hey, if you're dealing with

Starting point is 00:18:36 money, you just have the same laws as any other entities, which, okay. I mean, that's fine. And then according to reports, the amendments legalizing crypto trading in South Korea contains similar provisions to the guidelines already established by the Financial Action Task Force, or FATF. Now, the financial action task force, some of the elements of it seem a tad overbearing. The thing is, once you're in, once you have cryptocurrency, it's very difficult to, to enforce anything at that point because you can't stop or prevent transactions from happening.

Starting point is 00:19:17 It's the on and the off ramps where you get that pinch. But once you obtain or earn or utilize cryptocurrency in any way, shape, or form, the protocols themselves don't recognize regulation, right? So if somebody utilizing that currency doesn't abide by regulation, it doesn't stop transactions from happening. Could there be consequences for the individual or the entity not abide? abiding, yes, but on its head, it's, it can be stopped. It's not like a bank where the bank stops you mid-transaction or stops somebody mid-transaction because something isn't allowed.

Starting point is 00:19:54 It's after the fact, whether or not consequences happen. And sometimes it's difficult to pin down who's doing what. So realistically, what they've done here is, yes, they've regulated on and off-ramps, kind of giving more or less a stamp of approval, as I said, but it's more or less just saying, hey, we're trying to regulate this. We're fine with a happening. Just please, please do play by our rules. And the businesses buying and selling and dealing with it directly will. But the people, that's where the question mark lies. And one more little thing on government. We still get the ones that are very dismissive. Obviously, there's a lot of dismissive people in and around Bitcoin.

Starting point is 00:20:45 It's still very early, as we've seen from a lot of the stories here. But this is the Bank of England governor or the next Bank of England governor. He said, if you want to buy Bitcoin, be prepared to lose all your money. Bitcoin has no intrinsic value. I mean, to be fair, most things do not have intrinsic value. It's very subjective what intrinsic value even is. And so do the paper $20 bills in your pocket have any intrinsic value either? No, not really.

Starting point is 00:21:28 Bitcoin has value for those who value it. And people value it for different reasons. I myself value it as a store. of value and a hedge against rampant inflation and just terrible monetary policies on the behalf of central banks. Some people view it as an excellent way to shield themselves from asset forfeiture or asset seizure. Other people find it a way to transact where they don't have access to banking. Other people find it an easy way to transact internationally. So it really depends on who you are and how you want to utilize Bitcoin for what its intrinsic value is to you. It varies. A lot of people try to

Starting point is 00:22:13 place the way that they value Bitcoin on other people or the way that they don't value Bitcoin on other people. And again, what we've learned is it's just completely subjective. So rather than telling people Bitcoin's value, look at it yourself and see what the value is for you. I guess that's That's what I'm going to cap it on here. Anyways, guys, thank you very much for watching. Of course, if you're watching this on YouTube, please remember to hit like, subscribe, and share. Always hit share.

Starting point is 00:22:45 Nice to get new people watching these. If you're listening to this on the podcast audio only, please share it on your social media. Great to have more people listening. If you want to help with the show in another way, you can hit up the sponsors down below. That was Paxful, Rise Wall. And of course, we've got ledden.io.

Starting point is 00:23:01 This is where you can use your Bitcoin for a variety of services, they've got savings accounts where you can earn interest, they've got Bitcoin-backed loans, where you can use your Bitcoin as collateral to get Canadian or U.S. dollar loans, and they've got their B2X offering where you can get double the exposure to the price fluctuations of Bitcoin, especially if you're a giant Bitcoin bull. So be sure to check them out. If you want, there's a link in the show notes, as I mentioned before, and if you get a loan, they'll actually credit you with an additional 50 bucks worth of Bitcoin. So be sure to check them out. And as always, if you really like what you saw, I can always.

Starting point is 00:23:33 drop me a lightning network tip at my tippin.me page that's tippin.combe slash at btc sessions and with that i'm out have a wonderful evening and i'll see you guys next time for your daily session

BTC Sessions - Coronavirus tanks stocks but Bitcoin up, NYC power plant is mining, India embraces BTC EP026

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