BTC Sessions - How Halving Will Affect Bitcoin Buy and Sell Pressure, Robert Kiyosaki Bitcoin Bull, Lightning and Liquid Innovation EP038

Episode Date: April 2, 2020

SUPPORT THE SHOW: Visit LEDN to check out getting a bitcoin-backed loan https://platform.ledn.io/join/0a00cca3dd61dea5909c95cd41f41685 Buy Bitcoin on Coinberry and get $20 after your first $100 purchase https://app.coinberry.com/invite/c5d52730857 Get Wasabi wallet and enjoy your privacy https://wasabiwallet.io/ Wasabi Tutorial https://www.youtube.com/watch?v=ECQHAzSckK0 Get NORDVPN to protect your online privacy. 75% off a 3 year https://nordvpn.org/btcsessions Check out my website for private bookings: http://btcsessions.ca/ Join my Telegram channel! https://t.me/btc_sessions If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions SHOW RESOURCES: Halving and Miner Capitulation – how it all affects the price of Bitcoin https://www.blockwaresolutions.com/research-and-publications/2020-halving-analysis Bull Bitcoin launches LCAD – liquid Canadian Dollar on Blockstream’s Liquid sidechain https://lcad.bullbitcoin.com/ Robert Kiyosaki is bullish on Bitcoin https://twitter.com/theRealKiyosaki/status/1245205778849394688 Physical Gold shortages abound https://www.bloomberg.com/news/articles/2020-04-02/want-a-gold-bar-under-your-mattress-get-in-line-and-pay-up Max Keiser believes deficiency in gold market is bullish for Bitcoin https://cointelegraph.com/news/gold-is-toilet-paper-for-the-rich-bitcoin-for-the-poor-max-keiser US Jobless claims rise 6.6 million, bringing total to nearly 10 million https://www.cnbc.com/2020/04/02/weekly-jobless-claims.html Bitfinex increases lightning network capacity https://blog.bitfinex.com/announcements/bitfinexs-lightning-network-capacity-is-now-even-better/?utm_source=social&utm_medium=banner&utm_campaign=bfx_LightningNetwork_newnode UK challenger bank Revolut opens Bitcoin/crypto exposure to all its global customers https://decrypt.co/24281/revolut-brings-bitcoin-to-all-of-its-7-million-users BTSE Debit card https://www.btse.com/en/debit-card Binance Debit card https://www.binance.com/en/blog/421499824684900479/Introducing-the-Binance-Card-Shop-and-Pay-With-Crypto-Anywhere-in-the-World

Wasabi wallet and fairly private. What's up everyone? I'm Ben with the BTC Sessions and this is your daily session. Before we get started, 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-backed loans, which were actually the first. first product there's that I ever use personally. This is where you use your Bitcoin as collateral to obtain a Canadian or US dollar loan. So if you're in a pinch and you need dollars like I did at the time, around this time last year in early March, actually, I was able to put my Bitcoin in a dedicated address that I could audit 24-7. I was given a Canadian dollar loan within 24-hour loan within 24 hours of that deposit after approval. And upon repayment on my loan, I got back all my Bitcoin. So I

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Checo Coinberry. And actually, if you do it using the link down below, you'll actually get $20 free after your first $100 purchase. With that, let's dive into the news. So I was listening to a couple of podcasts with Matt DeSuzza from Blockware Solutions recently. And I just really wanted to highlight this research that they put out in mid-March in regards to understanding the Bitcoin market participants in particular miners and how they can have a large influence on the price of Bitcoin just because of the dynamics of how they interact with the network and their capital costs and how they contribute and their block rewards and where they actually go. It's very, very interesting given that we have the having coming up and essentially minor rewards are going to be slashed in half.

And some people look at that very favorably. Some people look at that as a scary thing as if there's going to be a minor death spiral. In a narrative, we've seen lots of times before in previous years in and around the halving. Well, these guys do an excellent job with a lot of great research about where that capital is allocated and how, what affects miners currently. And so we just saw an influx of brand new, top-of-the-line miners come onto the network over the past number of months. And with that, we saw spikes in mining hash rate. And so it got very, very competitive. What this meant for anybody running old hardware, even if they have very, very good costs when it comes to electricity, is that any drops in price

can be very detrimental to their bottom line. And so they end up having to sell more and more of the Bitcoin they're mining just to break even. And sometimes it's even at a loss. Now, we did see a huge minor capitulation. As of late, we saw a nearly 16% drop in the hash rate of the Bitcoin network. And so what happens in those instances is all of the Bitcoin that, you know, 16% of the network was mining, well, that Bitcoin has to go somewhere and that Bitcoin ends up going to the efficient miners that are still able to weather these price differences. And what these guys have figured out is that pre and post-having, regardless of the price of Bitcoin, even with that, if the efficient miners are able to weather that temporary storm, the drop in hash power from all of the old,

equipment, a lot of which is going to be wiped out with the having, it just will not be profitable anymore, all of that capital will go to the most efficient miners on the network. Yes, there will be likely another drop in hash rate at that point. These guys have put it together and they figure that there's good, there could be a drop as much as 40% of the network when it comes to either people that are mining at too high of an electricity cost or they're mining with old equipment or both. And what they posit is that a lot of that hash power of the old equipment will gradually migrate to places where the electricity is either heavily subsidized or nearly free. But eventually it will get forced off by more efficient equipment. And we've seen a lot of that happening. And

if indeed 40% of the mining hash rate does drop off, then again, that Bitcoin has to go somewhere. It goes to the most efficient miners in the network. And all of a sudden, those miners, their margins, go up because of this and they have to sell even less. So even though there would be a drop in hash rate in this instance, all of a sudden there's way less sell pressure. And the pushing out of this old inefficient hardware and these inefficient miners is incredibly bullish for the price of Bitcoin because the miners no longer are required to sell just to make ends meet. Now, it should be clear that the inefficient miners won't immediately be shut off because a lot of them tend to be in situations where they're locked into a contract with their utilities companies or they're

locked into a contract with the place that they're actually renting from for space. And those contracts don't, they're not gone right away. And they may want to try and eke out as much efficiency as they can or, or keep paying the bills. So they go into their stash of Bitcoin that they've been putting away as a treasury and sell that off too. And so in the short term, there continues to be sell pressure from inefficient miners, but in the long term, that does go away with the cycle of the having. So I highly recommend you read through the research here from Blockworth Solutions and listen to really any podcasts, especially recent podcasts that feature Matt DeSuzza on them. I listen to the one from Anthony Pompliano, but he's been on a few different podcasts recently, but be sure to check

that out. I'll link it down below as well. And just a quick reminder that we are 40 days out, just shy of 41 days out from the Bitcoin block reward having. It is right around the corner. So we will see, get to basically watch this play out in real time. And with that, the price of Bitcoin, we did have a massive wick to the upside earlier today. It's since kind of retraced most of that. We did see well above 7K. We got in and around the close to the $7,300 range.

but we'll just see if this was a deviation or not in the coming hours. I mean, by the time this air is, who knows where the price will be. But cool to see that it kind of broke through that resistance in the 6,900 range where we had been 68, 6,900 rage that we had been bumping up against. But whether it stays up there or not is anybody's guess. Right now we're sitting right in and around that price point. But we did see a lot of people shorting. that just got wiped out. It's dangerous to short the corn, that's for sure.

Anyways, let's move on here. I did want to draw attention to Bull Bitcoin. They announced that they are launching Canadian dollars or Liquid CAD on the Liquid Network for Bitcoin with Blockstream. And so what this does is right now as Bill Bitcoin works, when you fund your account, you receive a voucher that can be redeemed at any point for the Canadian dollar equivalent of Bitcoin. You cannot pull that off again as dollars. You need to redeem it for Bitcoin, or you can go and then buy Bitcoin and resell it and get Canadian dollars sent to your bank account. Well, with liquid Canadian dollars or L-CAD, the way it works is that voucher essentially is removable from the

removable from the bull bitcoin platform and can be stored in something like a block stream green wallet as a token. Now they do go to great lengths to specify that this is not exactly

a general purpose stable coin it's basically just a voucher for the bull bitcoin platform and any affiliated platforms that might utilize it but there is is counterparty risk involved with this, obviously, because if you buy a gift card for any store and that store goes out of business, it may not be redeemable in the future. So just keep that in mind,

but kind of cool to see that you are able to pull those vouchers off of the bull Bitcoin platform stored in a wallet on your own and potentially even gift those to other people. It kind of takes the idea of like a digital gift card that can be transferred from person to person and then redeemed on the bull bitcoin platform at a later date. So very interesting to see what bull bitcoin is doing with the liquid network and congrats to them for the launch of this feature. Now, I wanted to highlight this tweet earlier today, or sorry, I guess a couple days ago, from Robert Kiyosaki. Now he is the guy who wrote Rich Dad, Poor Dad, a book that I really, really liked that highlighted some of the features of the financial markets and ways of thinking about

money and capital and where you put your money and how your money can actually work for you as opposed to you working for your money. And Robert Kiyosaki has been a huge fan of sound money in the past of things like gold, but he has become privy to Bitcoin in the recent years. And he seems to be getting quite bullish on it. And as somebody that I have kind of looked to, as someone who has a good idea around money and the value proposition of it, and when it ceases to function, this is cool to see. So what he tweeted out was, save money. Are you nuts? Why save money when quantitative easing, fed counterfeiting, is printing trillions of fake dollars, 82 billion a month to 125 billion a day?

Why save when zero interest rates, zero interest policy, pays losers zero. Save gold, God's money, or Bitcoin, the people's money. So, and I mean, obviously, Bitcoiners rejoiced at this, a lot of people, you know, one of us. But yeah, really cool to see somebody that's been in and around the finance realm for years and years. turning to and finding extreme value in Bitcoin and recognizing the Ponzi scheme that is the Federal Reserve and their printing of trillions of dollars. Now, I know that a lot of Bitcoiners are not particularly enamored by gold anymore. They see it as old currency, as as as hard money of the past, but Bitcoin comes along and it's significantly better for a number of reasons.

And so I just wanted to highlight some of the other stuff in and around gold right now. Gold dealers, this is off Bloomberg, are reporting big shortages of small bars and coins when it comes to gold. And a lot of that has to do with a couple of things. Number one, with the coronavirus, they're shutting down a lot of the mines that are actually pulling gold out of the ground at the moment and and forging these gold bars and coins. As well, a lot of that operation has been shut down. a lot of people with physical gold are not wanting to sell it right now while it's on the rise obviously and a lot of people with paper gold are becoming very mistrusting of institutions holding their actual gold for them and are demanding physical delivery of which many of these gold dealers just don't have the stock to do that

and there's been a huge pinch a huge shortage of bars and coins for a couple different reasons like I highlighted that they just don't have the supply, but also a lot of these paper contracts actually don't correlate with a specific claim to a specific bar of gold, or rather multiple people have the same claim to the same bar of gold or the same coin or whatever it may be. And so when shit hits the fan and everybody wants physical delivery, it's just not possible. There is not enough gold to pay out all of those paper contracts, and that becomes very very, very pronounced in markets like these. And you also see, this is Alasdair McLeod tweeted out,

LBM just sent me another email claiming more than $400 billion gold in London vaults. It is a matter of fact that the free float is less than 1,000 tons, and that's $50 billion. So a far cry from the 400 billion claimed. The fact that they insist in deception is proof that they must be deeply concerned. They have reason to be. And those of you not familiar, LBMA, they are a global OTC precious metal market dealer. So they say they set the standards for purity form and provenance of the bars to the way in which they are traded.

And so they claim to hold a lot of gold, but that may or may not be the case. Either way, they're having trouble actually delivering on that. And then since we're in the vein of gold, I wanted to highlight Max Kaiser, had some fun quotes just the other day on the Kaiser report. He said, I predict, and this is only the ultimate use case, but the ultimate, it's not only the ultimate use case, but the ultimate irony that once people realize they cannot get gold, they'll start flocking to Bitcoin. and mass to Bitcoin.

And so he's, again, highlighting these issues in the gold markets. He also said, remember, billionaires think of gold and silver the way that the unemployed think about toilet paper. They're all rushing to get it. Don't really know why. Now, I will say, because he's highlighting the issue around people not being able to get their hands on physical gold. And that is an issue because they think they have it, but they,

don't. But I think that more or less the real issue will be when they can actually get it, because that will likely be, you know, after the virus has been dealt with and things start to function as normal once again, that inflated price of gold has a very real effect. In that a lot of gold mines that used to be profitable that were shut down when the gold price was down will come back online and there will be an influx of supply of new gold onto the market more so than before. And what this does is it has a chilling effect on that kind of upward trajectory of the gold price as more supply floods the market. And so the gold price in a way, while it can fluctuate and be volatile, it is, it does have kind of an upper limit because it's self-regulating in that

more miners come online. More miners. start mining gold and pumping it into the market and the supply lifts to meet the demand of the market. And then once that threshold is hit, you may see either a stabilization or a drop if the supply keeps on being pumped up. Bitcoin doesn't have this, which is why we see even more extreme volatility. When everybody doesn't want Bitcoin or when a lot of people are selling Bitcoin, you don't shut down the miners or, rather the mining rate of new coins remains the same. And we saw this all through the bear market through 2018 through 2019. It doesn't matter how low the price goes. The number of new coins coming onto the market every single 10 minutes remains the same. But the same is true to the

upside, to the inverse. When the price is skyrocketing, if there were more supply, people would be there to buy it, but there's not. There is just not. And so when you see these, manias and people are trying to get their hands on Bitcoin, no matter how many miners jump onto the network, no matter how many people are trying to mint new Bitcoin and be able to sell it, the supply and the new issuance remains constant other than at the time of the having when it gets cut even more. And so in this respect, Bitcoin is the most scarce assets the world has ever seen. there's never been anything more scarce with this kind of network effects and this kind of demand. And so again, we will see this play out over the coming couple of years, having just

right around the corner 40 days out and over time that pinches felt and we will see, we'll see if history repeats itself, history rhymes. Now on global markets, or at least in the U.S., jobless claims have gone through the roof. Last week we saw a bit over 3 million, I think it was 3.3 million filings for jobless claims in a single week. Well, this week that doubled to 6.6 million. I'm not talking about total. This is new. New jobless claims. So they are just shy of 10 million jobless claims in the U.S. And there's some pretty dire projections of positive. possible where this could be going as far as unemployment in the U.S. I've seen as high as 30% or more potential unemployment in the U.S. when this really hits the fan. And let's remember that when things turn around when the virus is gone and dealt with, hopefully sooner rather than later,

but once that shit has been dealt with, it's not like everything just turns back on and everything's fine again. it's going to take time. And a lot of those jobs just won't be there because those companies won't be there. Some of the smaller companies are going to disappear. We're already starting to see that. And just companies that do have capital and do come back online and are ready to embrace new customers once again, they're not going to be as risky with their money. They're going to be pretty risk-averse because they won't be quite sure if it's over and they don't want to risk that kind of capital. if we continue this downtrend further.

So just reading a little bit from CNBC here, the torrent of American filings for unemployment insurance skyrocketed last week as more than 6.6 million new claims were filed. The Labor Department reported Thursday. That brings to 10 million the total Americans who filed over the past two weeks. Economists surveyed by Dow Jones had expected $3.1 million for last week, one week after the 3.3 million filings in the first wave of what had been a record-shattering swelling of jobless ranks. The previous week's total was revised higher by 24,000. Stock market

futures gave up most of their previous gains in the morning, but still pointed slightly higher on Open for Wall Street. And looking at the markets right now, the Dow is still up by, not by much, about 73 points. So it's about a third of a percent. S&P again, about half a percent. Not much, you know, not much across the board. It's pretty flat. Honestly, I'm surprised it's not down big time

because these are pretty dire numbers and they don't paint a nice picture. And it makes me believe that we've only begun to see the depths of this. market and I think it will get much worse before it gets any better, but time will tell. Okay, moving on, I did want to highlight this. BitFinex has upped their lightning network capacity. So those of you unfamiliar, BitFinex did implement lightning network as a deposit and

withdrawal mechanism on their platform in the past year, which is awesome. And I think we need to see more of this in the coming years because if Bitcoin is to rise in price over the next couple of. of years and network capacity remains where it is, which it will, realistically, there'll be, there's optimizations and we're better off than we were in 2017, but if we see growth in adoption and more people trying to actually execute transactions, then we're going to need these release valves like lightning network, like liquid network. And so it's good to see BitFenex continuing to deliver on that. So just to read a little bit from their blog here,

To serve your needs better, we decided to upgrade our Lightning Network integration. Before the update, there was a maximum payment of 0.04 Bitcoin, which we have now expanded to 0.5 Bitcoin. Payment channels will also see an increase from a maximum of 0.167 Bitcoin to two full Bitcoin. Not bad. To take full advantage, you can open a channel to our new node, aptly made aptly named BFX L&D1, which you can find the details here and they go on more to talk about, to talk about what they, what they're doing with the Lightning Network. But again, I firmly believe that a lot of, a lot of these exchanges that have inflows and outflows are going to have to do a number of things. Number one, transaction batching. We've seen that

more or less across the board with most major exchanges. It's about friggin' time that Coinbase did it. They just announced, I think it was last month, which is unbelievable that they were even proud of that three years after the fee crunch. But better than late than never, I guess. But people are going to have to start looking to things like lightning and things like liquid, because on-chain is going to be very difficult. And batching transactions and using Segwit and native Segwit are a huge.

improvement and they do help keep down network usage so that fees remain reasonable, but that will not be enough on its own. You need to be using lightning and liquid just to help with those release valves and cutting down on those on-chain fees to make it feasible for withdrawals. At least give people the option if they opt to use it. And I think it's an, I think lightning is getting there where it is becoming usable like that. I really enjoy Phoenix wallet, and they are talking about Phoenix wallet in this BitFenex post. I won't go too much into that. But that's what I like to see out of a lightning wallet where it more or less becomes seamless

between a regular Bitcoin transaction and a lightning transaction and the wallet itself just understands what you're trying to do and just does it in the most efficient way possible. So I do really enjoy that. Moving on here, I wanted to highlight Revolut, which is a, what do they call it, a chat, Challenger Bank in the UK. They're expanding Bitcoin and cryptocurrency options to everybody across the board. So I'll read a bit from this decrypt article here. They say, UK Challenger Bank Revolut has expanded its cryptocurrency offering to all of its users as an alternative to government-backed fiatur currencies. As governments around the world push stimulus packages, including the printing of new money known as quantitative easing,

Revolut argued that Bitcoin offers an alternative because it has. a fixed supply. During a recent presentation, our head of crypto, Edward Cooper, reminded us that cryptocurrencies came about as an alternative to real money during the times of quantitative easing and currency devaluation following the 2008 financial crisis. Given the recent economic upset, we are starting to see quantitative easing and currency devaluation happening again right now. This was in an email to their customers. We had planned to make this official later this year, but in light of recent news, we've decided to give all Revolute customers the opportunity to explore different ways of diversifying, including through crypto, right now.

And so what this does, essentially, it's one of those online-only banks where you can fund your card with money, you can use it to pay wherever you like, you can convert it between various assets and various currencies, and I believe it was just in the UK. Previously, you had access to gain exposure to Bitcoin and other cryptocurrencies, but they've now rolled that out everywhere. Now, it should be noted with the Revolut card, you actually, as far as the last time I checked, cannot withdraw any cryptocurrencies, you can only gain exposure to them. And so that you're tracking the price fluctuations, but if you want to actually see any of those gains, you've got to convert it back to your local currency and spend via your card.

So if you're like myself and you like to actually hold your own cryptocurrency, which I highly recommend, then this may not be an option for you, but some of you may wish to gain some exposure that way. Now, this isn't the only card on the market here. There's a lot of companies that have already launched and are launching similar debit cards that are actually exchanges first and foremost. where I'm working right now, they're launching a debit card. So again, it's kind of a push to avoid traditional banks and use Bitcoin and cryptocurrency first before defaulting to traditional banking. And so this is essentially a master card. You can withdraw $5,000 U.S. dollars a day, spend up to $250K a month, and then they have points and bonuses and things like that. Of course, you've got Binance.

They're launching their card and similar idea where you can pay and you can convert your cryptocurrency into usable dollars or local currency and use it wherever you like. And I've done videos on stuff like this in the past where you have more or less a debit card linked to the cryptocurrency of your choice. So back in 2016, I checked out Bitwalla and I checked out Wirex. And I did find them as a viable alternative, especially when traveling if you're largely into Bitcoin and other cryptocurrencies. It was a way to have access to that anywhere and just be able to spend it wherever you like. Now, I did find that you have to be aware of what the fees are on some of these cards because it can vary quite a bit and whether you need to convert to the local currency of your choice or not before utilizing them.

So, for example, I had a card that I used in the UK that was the native value of the card was in pounds, and you would just convert from Bitcoin to pounds before using it. And those transactions were free. But if you're pulling out of an ATM, then it would sometimes cost 3%, or there'd be like a dollar or a pound amount that every time you made it withdrawal. So just be aware when you're dealing with these cards and make the best decision for you if you opt to use them. Now, I'm going to wrap it up there, you guys. Thank you so much for watching. As always, please do remember to hit like, subscribe, and share if you're on YouTube right now.

If you're listening to this audio only on the pod, then of course do subscribe and share it on your social media as well as please, please do hit the review button and create a review on the platform that you're on. It does help a lot with visibility. Now, if you want to help out the show in another way, you can hit up the sponsors as I mentioned before down below. that was Leden and Coinberry, the new one for the month. You can also check out NORVPN. This is a platform that I use quite regularly on my computer and my phone. It hides your IP address. It encrypts your browsing data.

And it also has the added benefit of unlocking geo-blocked content. So if you want to check that out, there's a link down below that gets you 70% off, plus some extra months free, ends up being about $3.49 a month. With that, I'm out. Have yourselves a wonderful evening and wonderful rest of the day. And we'll see you next time for your daily session.