BTC Sessions - GOLDMAN SACHS ON BITCOIN: Client Demand Is Rising ep156

Starting point is 00:00:42 Wasabee wallet and fairly private. What's going on, everybody? Welcome to this show. I hope you're all doing well. I hope you're having a good week. Lots of stuff going on this week. Of course, we're going to be talking about Goldman Sachs and the demand for Bitcoin products from their customers.

Starting point is 00:01:02 We're going to be talking a little bit about J.P. Morgan. We're going to be talking a little bit about a lot of different things, big company in Norway that's going all in Bitcoin, tons of stuff on the docket today. As always, this is of course live, so a quick disclaimer from my good friend Bill here. We'll do it live. We'll do it live. Do it live. I'll write it and we'll do it live.

Starting point is 00:01:30 The thing sucks. It's looking to be an exciting end of the week and weekend. Prices are starting to tick upwards. We're getting close to that all-time high. We're going to take a look at that in a second. As always, guys, I am Ben with. the BTC sessions and this is your daily session. Here we go. So before we get into this, let's take a look at where we are in the market. So I'm going

Starting point is 00:02:11 to be pulling up the bitbow.io dashboard. Right now we're sitting at $57,700 some odd dollars. It's fluctuating quite a bit here and there. But yeah, we're getting pretty close to that previous all-time high. We were up at 579. Not too long. ago within the last hour or so if you want to get a little bit more granular with the price here here's kind of a zoomed out look at the current price you can see that we're basically just about the all-time high here on what is this this is i believe bitfinex uh yeah i believe so um anyways so all-time high listed here 58 321 we're sitting at 57 7661 So again, like 500 bucks off the previous all time high.

Starting point is 00:03:04 So we could see some crazy moves. Just for reference, here's the last time that we went through the previous all time high. That's when we had, what is this candle? It had a low of 30, just under $38,000 and it had a high of around 46.5. So that was like damn near a $10,000 candle as soon as it broke. out from that. I'm not necessarily saying that's going to happen again, but you know, it's possible. It's definitely possible. Exciting times. Now, what else do we want to look at here? Right now, for a single U.S. dollar, you can pick yourself up 1,733 sats. That is going down, my friend. Stack those

Starting point is 00:03:50 sats while you can. 88.82% of all Bitcoin have been mined. And in terms of fees, right now, next block, you're looking at 101 sats per byte. If you're willing to wait an hour, around 67 sats per byte will do you. Now, before we dive into the news, of course, shout out to sponsor the show, leden.com. where you can use Bitcoin for a variety of different services. They've saved my butt a couple different times with their Bitcoin back loans. So when I needed dollars and I didn't want to sell my Bitcoin because that's taxable. And I was worried about having a buy back in at a higher price. I was able to park it here, get dollars to my bank within 24 hours.

Starting point is 00:04:26 And when I paid back those dollars, I got back the same amount of Bitcoin. They've, of course, also got their Bitcoin and USDC savings accounts and their B2X offering using the same loan mechanism to buy more Bitcoin if you're super bullish. Check them out. Links down below. If you click that link and opt to get a loan product, they will give you 25 bucks for free into your savings. Up next, Kobo Vault, one of my regularly used hardware wallets.

Starting point is 00:04:49 I love it. It's totally air-gapped. That means that you never plug it into a computer or a phone. It's all offline, keeps the keys to your money safe and secure. And it's all done via QR code. Super easy to use. Check it out. I've done a tutorial.

Starting point is 00:05:03 And I'm using the Kobovalt Pro links for that are down below. Now, I do live on Bitcoin. One of the ways that really helps me is bit refill. You can get just like any damn gift card you can imagine right here. And they accept Bitcoin on main chain and via Lightning Network for those cheap and instant transactions. So check them out. Also, you earn Sats back as you shop, which definitely helps me.

Starting point is 00:05:24 And they've got a nice referral program. So check them out. And finally, if you're backing up a Bitcoin wallet, please, guys, be careful. I've been hearing horror stories lately of people not properly backing things up and just losing their money. So one good way to do it is with the bill foddle, which is solid steel. This is just an order of magnitude better than putting it on a piece of paper. because paper is susceptible to fire damage to water damage or you might just accidentally throw the damn thing out,

Starting point is 00:05:54 which is some of the horror stories that I've heard recently. So get it on steel, get it secure, keep it safe, Bill Fottle, check out Privacepros.com. With that, let's dive into the news. Lots going on here. Goldman Sachs, this is from Reuters here, Goldman Sachs customers demand for Bitcoin rising from the C.O. So Goldman Sachs Group, Inc, is exploring how it can meet rising customer demand

Starting point is 00:06:16 to own and invest in Bitcoin, While still staying on the right side of regulation, bank president and chief operating officer John Waldron said on Wednesday. Quote, client demand is rising, Waldron said, we are regulated on what we can do. We continue to evaluate it and engage on it.

Starting point is 00:06:35 The bank recently restarted its cryptocurrency trading desk, and this month it started dealing Bitcoin futures and non-deliverable forwards for clients. Goldman is also exploring a Bitcoin Exchange traded fund and has issued a request for information to explore digital asset custody. Waldron said Goldman can custody digital assets but can't principal them and is in talks with regulators and central banks about how banks should be regulated when dealing with digital currency. The U.S. SEC is mulling how to regulate broker dealers who are holding digital assets

Starting point is 00:07:11 for clients and ask for public comments on the matter in December. So obviously, the antiquity. banking system is having a hard, hard time keeping up with the demands of clients. But, you know, eventually they're going to shove themselves through the door. So I won't be surprised to see more options for more traditional folk in the future. Now, this is a big one moving on here to this article from CoinDesk, Norway listed acre to put 100% Bitcoin in treasure reserves of its new investment unit. Now, if you have not read their letter to their shareholders, it is a doozy.

Starting point is 00:07:53 I highly recommend you take a look for it. And alternatively, you can check out Bitcoin Audible because Guy Swan did a great reading of it. Definitely worth a listen. Check them out. But besides the fact, in an announcement on Monday, the holding company focused on energy, construction, and fishing said its new entity, CT will keep all liquid investable assets in Bitcoin and will also enter the Bitcoin mining industry. Quote, first we will use Bitcoin as our treasury asset and join the community. In Bitcoin speak, we are hodlers.

Starting point is 00:08:30 Now, the chairman said that CT is launching with 500 million Norwegian Corona or $58.3 million in capital. The new firm has already partnered with Canada's block stream for work on Bitcoin mining and side chain projects, end quote. He said, Bitcoin may still go to zero, but it can also become the core of a new monetary architecture. If so, one Bitcoin may be worth millions of dollars. So pretty bullish over here from Aker and their new venture CT.

Starting point is 00:09:04 Now, moving down the line, here in Canada, we just launched our third Bitcoin ETF. Now, this article was just before it launched here. So forgive the parlance. But they said, according to an announcement from provider CI Global Asset Management, regulators have approved the final prospectus for the CI Galaxy Bitcoin ETF. ETF is expected to begin trading or did begin trading on Tuesday, subject to approval from the bourse under the ticker BTCX. BTCX will give investors exposure to Bitcoin by investing directly in the cryptocurrency with holdings priced using the Bloomberg Galaxy Bitcoin. The listing, if approved, would make BTCX the third approved Bitcoin ETF in North America. As we know, it now is.

Starting point is 00:09:52 In February, similar products, Evolve Funds Group, and purpose investment both listed on the TSX. And the quote here, I believe our ETF stands out based on its highly competitive price point and CI in Galaxy's extensive capabilities and track record in managing alternative investments and digital assets. Now, they are quite competitive. 0.4%, I believe, is their fee, which undercuts basically everybody. I've been in a lot of clubhouse chat rooms and there's a lot of Americans saying, can I get access to the Canadian ETAF? And depending on your brokerage, you can. I've heard of some people from fidelity being able to get access,

Starting point is 00:10:35 but you have to actually call and request access to the Toronto Stock Exchange. So if you've gotten access to it and you're from the U.S., let me know in the comments down below. I would love to hear about it. Now, moving on, J.P. Morgan to launch cryptocurrency exposure basket of Bitcoin proxy stocks. God, the U.S. needs to get a fucking ETF already because everybody's trying to figure out how the hell to get exposure to Bitcoin without having to custody themselves, which is funny. but there's definitely traditional-minded investors that just want the exposure and they don't want to deal with private keys. And if you don't give them that opportunity, they're going to find it other ways. People are using micro strategy as a Bitcoin ETF.

Starting point is 00:11:23 J.P. Morgan is hodgepodging together a bunch of companies to say, well, at least you have sort of exposure to Bitcoin. So let's read what they're doing here to get around the fact that there is no ETF. Just weeks after JPMorgan Chase published a report warning that traditional financial companies are at risk of falling behind in digital finance, the largest U.S. bank is looking to issue debt linked to cryptocurrency-focused companies. JP Morgan, cryptocurrency exposure basket, the incoming debt instrument, is long on micro-stratogy, as I just said, Square, Riot blockchain and chipmaker, Nvidia, with positions in 11 companies in total. It does not invest directly in crypto, according to the prospectus. The basket companies operate businesses that we believe to be directly or indirectly related

Starting point is 00:12:15 to cryptocurrencies or other digital assets, including as a result of Bitcoin holdings, cryptocurrency technology projects, cryptocurrency mining projects, digital payments, or Bitcoin trading, J.P. Morgan said in the prospectus. The filing reveals yet another way Wall Street plays. players are looking to give their clients access to the upside of the booming crypto market, which Coingekko now estimates at $1.7 trillion across the entire ecosystem. The prospectus documents state that the notes will pay out based on the basket company's performance, less a 1.5% deduction, which is essentially the fee.

Starting point is 00:12:57 The cost, they cost a minimum of $1,000 and have a match racing date of May 2022. So yeah, people are just trying to figure out how to get any sort of exposure into this market because the traditional markets are just too regulated to keep up with what people actually want. And it's kind of hilarious to watch. Although I will say now that Canada has three ETFs, how laughable is it that the states and the regulators down there are dragging their heels on this. It is ridiculous to see. I would be so surprised not to see a Bitcoin ETF at some point this year.

Starting point is 00:13:37 Like at this point, what the hell are you doing? Moving on, speaking of governments, not knowing what the hell to do with all this, Nigeria is now rewarding citizens for using licensed money senders instead of crypto. So in a letter dated March 5th, the sign and signed by Associated, director AS Gibran. The CBN said it launched the Naira for dollar scheme for remittances in a bid to funnel payments from abroad through official channels. The incentive program went into effect Monday and ends May 8th.

Starting point is 00:14:13 In effect, a typical recipient of remittances will, at the point of collection, receive not only the U.S. dollars sent from abroad, but also the additional five NARA per one dollar received the letter states. In February, the CBN issued a five-page statement, clarifying its position on cryptocurrencies, stating that they are not a form of legal tender in Nigeria. As a means for cross-border payments, cryptocurrencies remain a popular option in the West African nation.

Starting point is 00:14:42 And according to data site, useful tulips, Nigeria is by far the leading country in sub-Saharan Africa for peer-to-peer Bitcoin trading volume. So a little bit of context here. About a month back, as they said, in February, Nigeria came out and we're like, hey, guys, we already banned this, but we just wanted to remind you guys that we banned this. So you're not allowed to use Bitcoin, so don't. And so this prompted some banks to end relationships with any Bitcoin-related companies,

Starting point is 00:15:18 but it also prompted a massive influx in the use of peer-to-peer trading markets with Bitcoin itself. They also had government officials going on record as saying that Bitcoin is making our currency useless, which I would reply to that and say, no, you have made your currency useless. People just now have another option. How funny is it that they've effectively banned Bitcoin twice, and now they're saying, okay, we banned this other stuff. But if you actually use the stuff we want you to, then we'll give you extra money.

Starting point is 00:15:58 Yeah, it's, it's, I feel like they have no idea how to handle this. Okay, moving on, digital currency group announces plan to purchase shares of grayscale Bitcoin trust. So I'll read this and then I'm going to give you a little explainer as to what's going on here. Digital currency group or DCG, the parent company of grayscale investments LLC, has authorized the purchase by DCG of up to $250 million worth of shares of grayscale Bitcoin Trust or GBT. Digital Currency Group plans to use the cash on hand to fund the purchases and will make the purchases on the open market at the management's discretion in compliance with rule, blah, blah, blah, so on and so forth. Anyways, what is going on here?

Starting point is 00:16:48 Well, there are now starting to be more options in terms of exposure to Bitcoin. Some people, like I said, are maybe going and buying shares of micro strategy. Some people from the U.S. are maybe getting access to the Toronto Stock Exchange and buying one of our three available ETFs. Others may just be buying and self-custodying Bitcoin. And there may be rumors, like I would imagine, that there could be a Bitcoin ETF coming down the line. Now, GBT is different from an ETF. How so?

Starting point is 00:17:24 An ETF effectively says you are getting direct exposure to the price of Bitcoin. And we will buy more Bitcoin as we need as more people want to buy shares of this particular ETF. That is not how GBT works. It is a closed end fund. So what they do is they say, we've got a set amount of Bitcoin. And you can now buy shares of. this Bitcoin, whatever the amount, corresponding amount of Bitcoin is per share. Kind of like when you buy a gold ETF or something like that, you're buying a specific

Starting point is 00:17:59 amount of gold for the amount of money you're spending. But this is a closed-end fund. So limited amount of Bitcoin in this fund, limited number of shares, and then people have to bid for them. Now, when you are the only option, basically, for an entire country to get any sort of exposure to Bitcoin. and there's a limited amount of Bitcoin in that fund with a limited number of shares, then some people may be okay with paying a premium just to have the exposure of the price fluctuations of Bitcoin.

Starting point is 00:18:31 And that's what has happened. A lot of people started wanting to buy GBTC because they just really didn't have any other easy way to get access to Bitcoin. So there was a premium that built up on GBTC. However, there's starting to be a little bit of a discount. And so there's rumors around that. Well, why the hell is there a discount? What the hell is going on? Again, I think the rumors could be that there's an ETF coming down the pipeline

Starting point is 00:19:00 and people are trying to get out of GBTC to free up capital for the ETF. Or they're just getting access to Bitcoin in other ways and opting out of GPTC. And so what they've done, Grayscale, has said, hey, we'll buy up the shares that are left over. to kind of get us to a closer price point of where Bitcoin actually is. And so, yeah, it's just they're trying to even out so that the share price is reflective of the actual price of Bitcoin. We saw this happen in Canada because we did have a couple close end funds. Then when the Bitcoin ETF actually launched here, we saw a massive discount, sometimes double digits for the close end fund. And so what they would do is they'd then buy big portions of Bitcoin and it would kind of get diluted out.

Starting point is 00:19:50 So when there's a massive discount on that, it was kind of worth it to buy into the discount because, you know, eventually it will kind of normalize. But hey, interesting. I did not know a lot of this as to how this worked until we started seeing these steep price increases or declines in terms of versus the real price of Bitcoin. So cool to see. Not as cool to see for some, we'll say. Operation Hidden Treasure is here. If you have unreported crypto, get legal advice. So this from Forbes.

Starting point is 00:20:25 I'll read a little bit here. Basically, what you need to take away from this is that as soon as you actually make a realized game, you have bought Bitcoin, that Bitcoin has increased in price, and then you've sold it and actually received more dollars than you initially put in, that is a realized gain and that is under capital gains and is taxable. Now, some people may have not reported that. So here we get this article here. Damon Rowe, the director of the Office of Fraud Enforcement at the Internal Revenue Service

Starting point is 00:21:03 announced yesterday at a Federal Bar Association presentation on fraud enforcement priorities that the office has added some crown jewels, including a dedicated team of IRS criminal investigation professionals who are working on, quote, Operation Hidden Treasure. Operation Hidden Treasure is comprised of agents who are trained in cryptocurrency and virtual currency tracking and who are focused on taxpayers who emit cryptocurrency income from their tax returns.

Starting point is 00:21:34 Operation Hidden Treasure is a partnership between the Civil Office of Fraud Enforcement, and the Criminal Investigation Unit to root out tax evasion from cryptocurrency owners. So effectively, they're trying to do blockchain analysis to link individuals to actual Bitcoin and other cryptocurrency transactions and try and put a name to those transactions and then cross-reference that against reported income, assuming that it's a gain. So we should say what's exempt from this? I don't have it in front of me, but I covered it on a previous show. If you have taken dollars and bought Bitcoin in a calendar year, you do not need to report the purchase.

Starting point is 00:22:21 That was recent that came out. Somebody specifically asked, do I need to check that I have income if this is the case? I bought. I'm holding Bitcoin and I've done nothing. No. You are exempt from that. You do not need to report it in any way, shape, or form. as soon as it is an income, as soon as it is a realized gain you've sold or traded,

Starting point is 00:22:46 even if you're trading between crypto to crypto Bitcoin for anything else, it is a realized gain. So keep that in mind. And if you're unsure, well, I'll get into a little bit further down. They said, if you actually have unreported gains, they actually say here, do not talk to your accountant about past compliance mistakes. They say talk to a lawyer if you think that there's past compliance mistakes. The reason they say that is there's no privileged conversations that can be had there, and your accountant could be compelled to give up any information that you give to them.

Starting point is 00:23:33 So keep that in mind if you're really, really were. here. Okay. Let's move on. Just a couple last things here. U.S. stimulus, if you're living under a rock, they did approve some more stimulus, more trillions of dollars to be created out of nothing and just kind of funneled everywhere. I love this eye-catching Bloomberg article title here. US stimulus set to turbocharge world economy as Europe lags. Turbocharge the world economy. Wow. I'm surprised that it didn't turbocharge the world economy with the last, however many trillion

Starting point is 00:24:16 dollars that were printed via the last number of stimulus that were pumped out. But this time, guys, turbocharge, absolutely. Now, the other thing that they mentioned here on Bloomberg is that the core CPU, rises less than estimates. What's the CPI, by the way? The Consumer Price Index, a way of measuring inflation. So they say here that the index, excluding food and energy, increased 0.1% in February. Now, the measure was restrained by used cars, clothing, and medical goods.

Starting point is 00:24:54 Yeah, wow. Okay. So let's get into this little bit more. core inflation in the U.S. remains subdued in February. U.S. dollar index stays near 92, after the data. Inflation in the U.S. as measured by the consumer price index, arrived at 0.4% on a monthly basis in February

Starting point is 00:25:13 and matched analysts' estimate. On a yearly basis, the CPI rose to 1.7% as expected. The data published by the U.S. Bureau of Labor and Statistics showed on Wednesday. Moreover, the annual core C.P. which excludes volatile food and energy prices, edged lower to 1.3% and missed the market consensus of 1.4%. So what they're trying to tell you is that there's effectively no real inflation and you shouldn't worry about inflation, regardless of the trillions of dollars worth of printing. Now, where does that money go is kind of what gets inflated. And so depending on who

Starting point is 00:25:56 that money goes to, what they need to spend on or what they choose to spend on is what will get inflated in price. So what's going up in price? Well, the stock market was doing pretty well for a good amount of time there. Houses seem to be doing pretty well. Basically assets, assets that are actually worth anything have gone up. That means that people who didn't need basics like food and, you know, the, you basics of fuel and food and like actual rent and things like that.

Starting point is 00:26:33 Those people actually that got are getting stimulus checks. That's going to be like a pittance compared to what was actually printed and where that money actually flowed. And you see it reflected in asset prices. But let's take a little bit more of a look at this. Okay. Food prices are exploding. They make up the bulk of lower income spending baskets.

Starting point is 00:27:00 So here's a chart of the UN World Food Price Index up to basically current, just shy of March. And it's starting to look pretty vertical. Now this is, I'll read here, data collected by personal visit for the CPI program has been suspended since March 16th of 12th. 2020. When possible, data normally collected by personal visit were collected either by online or by phone. Additionally, data collected in February was affected by temporary closing or limited operations of certain types of establishments. These factors resulted in an increase in the number of prices considered temporarily unavailable or imputed. While the CPI program attempted to collect as much data as possible, many indexes are based on smaller amounts of collected prices than usual and a small number of indexes that are normally

Starting point is 00:27:59 published were not published this month. That includes food, guys. They didn't include food prices. I really like this comment down below. Okay, but you can order groceries online. It has the prices on the website. So the prices are out there. Yes, yes, they are. And I just wanted to use an example from December, actually, from a few months ago, from a guy that I had on the pod last week for Why Are We Bullish? So these are just some messages that he got from some of his suppliers. Good morning, guys. Rebar costs have gone up considerably very recently. Based on global scrap demand and scrap prices.

Starting point is 00:28:48 Our domestic sources, Rebar mills, have immediately raised the prices to a fabricators to reflect their increase in scrap costs moving forward without much notice. So they go on to say, please plan on a minimum of 15% to 20% rebar increase on any new projects you are building. So 20% inflation there. Dear valued customer, effective Monday, February 1st, 2021, a 4.8% increase will go into effect across the entire CS product line. The increase is necessary to cover inflationary costs we have been absorbing over the past two years.

Starting point is 00:29:26 As with any business, inflationary pressures have a direct impact on manufacturing costs. So they've been experiencing rapid inflation and escalation in the following areas. Raw materials including lumber, plastic, architectural coatings and stainless steel, labor costs, and healthcare costs. And yet another one. Manufacturers of several different products have announced price increases because of these manufacturer price increases. L&W supply will be implementing a price increase on the following products effectively January 11th, 2021. So wallboard, 20% up. Metal framing products, 10%, bead and trim products, 10% interior finishing products, 5%.

Starting point is 00:30:12 Fiberglass, bats and bowling wool, 8%. Mineral wool insulation, 4%. Semi-rigid fiberglass, 5%. Cementboard 5% EIFS, 6% rigid insulation 5 to 8% fasteners 8% Holy shit. Guys, there's no inflation. Believe me, it's not there. It doesn't exist.

Starting point is 00:30:31 This is not the inflation you are looking for. Yeah. I mean, this is why we Bitcoin, right, guys? This is everything that you're hearing is it's fine. We'll just print trillions and there will be no impact. you'll be fine, the money is fine, continue your life as you see fit. That's really not the case. And this is why Bitcoin is so important.

Starting point is 00:30:57 This is why people are starting to kind of actually make sense of this. You see it first in countries where they have hyperinflation, right? It's a no brainer there. People there, they get it. Okay, I want an out. I want a currency that cannot be debased by anybody. Venezuela, Argentina, more recently, Lebanon, even Turkey, Greece during the banking crisis, the Cypriot banking crisis, places like that where it becomes very evident as to what benefits Bitcoin brings them.

Starting point is 00:31:33 But then you also see people now that have to actually protect their capital, people that are in charge of shareholders, people that have large amounts of capital, and that are sitting on large amounts of cash and they're going, holy shit, you know, I have 500 million, I have a billion dollars worth of cash here, I have a responsibility to shareholders to get them the most bang for their buck.

Starting point is 00:31:55 And I need a place to park this money in the interim until it's actually used for a project or just to store the value there in case we need it in the future. And if I sit it in dollars, look at the prices of the products that we're going to need to, need to purchase in the future for any projects that we may have.

Starting point is 00:32:17 And it's just a losing proposition to hold dollars or any local currency that can be inflated by your government or a central bank because it will be. And so this is kind of the use case. We're seeing it everywhere. This is really the past year and a half has been insane because every Bitcoiner now has very real world examples to point to saying this is why. This is exactly why this exists. And I'm sure you're seeing it too.

Starting point is 00:32:44 Anyways, guys, I'm going to wrap up there. Thank you so much for watching and or listening if you're on the pod afterwards. Please do hit, like, subscribe, and share if you're here on YouTube. Those helps so much. It helps this show get in front of more eyeballs. If you want to help with the show in another way, you can hit up the previously mentioned sponsors down below. That was Ledon, Cobo, Bit Refill, and Bill Fottle over at PrivacyPros.i.o. and if you really loved what you saw,

Starting point is 00:33:09 which by the way, I've had a few lightning tips lately, you can hit me up with a lightning network tip at my tippin.combe page. So thank you to those that dropped some sats recently. I do see those. I do appreciate those. Thank you very much. Anyways, it's at tippin.comme slash at BTC sessions.

Starting point is 00:33:25 T-I-P-P-I-N dot me slash at BTC sessions. With that, I'm out. Have yourselves a wonderful evening or a wonderful day, wherever you may be, and I'll see you guys next time for your daily session. See ya.

BTC Sessions - GOLDMAN SACHS ON BITCOIN: Client Demand Is Rising ep156

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