BTC Sessions - Largest BTC Audit Ever, Early Bull Stage, Russians Threaten Jail EP100

Episode Date: September 25, 2020

SUPPORT THE SHOW: LEDN offers Bitcoin backed loans – Sign up and get $50 free https://bit.ly/2S1Sk1L Get Wasabi wallet and enjoy your Bitcoin privacy https://wasabiwallet.io/ Buy a Cobo Vault to secure your Bitcoin! https://bit.ly/2GgMFlH Cobo Vault Tutorial: https://www.youtube.com/watch?v=JnRjvZKulrA Crypto Cloaks: Get the BEST Bitcoin swag out there https://www.cryptocloaks.com/shop/ If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions Join my Telegram channel! https://t.me/btc_sessions SHOW RESOURCES: Largest coordinated Bitcoin audit ever https://www.btctimes.com/news/bitcoin-supply-to-see-synchronized-audit Bitcoin entering early Bull stage according to analysis https://www.btctimes.com/news/technical-and-fundamental-evidence-hint-bitcoin-is-at-early-bull-stage Bitcoin decouples gold after 3 year bear market https://cointelegraph.com/news/decoupling-bitcoin-vs-gold-ratio-snaps-out-of-3-year-bear-market Russia threatens jail time for unreported BTC revenue https://cointelegraph.com/news/russian-ministry-proposes-criminal-charges-for-failure-to-report-crypto-tax Israel could nix Bitcoin capital gains tax https://www.coindesk.com/israel-bitcoin-tax SEC Commissioner wants Bitcoin ETF Approval https://cointelegraph.com/news/commissioner-peirce-wants-to-see-the-sec-approve-a-bitcoin-etf

Wasabi wallet and fairly private. What is up, everyone? I am Ben with the BTC sessions and this is your daily session. Hottle their Bitcoin. Before we dive in, I want to give a shout out to sponsors of the show, Lendon.io. This is where you can use your Bitcoin for a variety of different services. They, of course, have their Bitcoin back loans.

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know why you want one of these. This seed plate can be a backup for any wallet that you have, but it stores your backup phrase in solid steel. So with that, let's dive into the show. So I wanted to start today on the Clark Moody dashboard, which gives you just a ton of data about Bitcoin and the Bitcoin blockchain and markets and everything. And I wanted to draw attention to one thing in particular, which is that we are at Block 649,973.

You might be wondering what the hell that even means. basically those that are relatively new to Bitcoin, Bitcoin pumps out a block of new Bitcoin transactions that are added to the Bitcoin blockchain roughly every 10 minutes. And so this is a measure of how many blocks have ever been created on the Bitcoin blockchain, how many blocks of transactions long it is. But something special is happening at block 650,000. So in what, in about 27 blocks. So it may have already happened by the time this airs, but we'll see. We will see. Maybe I'll air this a little early just in case.

Anyways, at Block 650,000, there is going to be the largest coordinated audit of the Bitcoin blockchain and how many Bitcoin exist that I assume has ever been done. And so what people are doing and why this is happening. This is an old article from back in August, but back in August there was some drama around auditing the supply of Ethereum. Pierre Richard began to ask if anybody could actually tell him how many Ethereum currently exist. A lot of people pointed to centralized sources that give numbers, but he said, no, no, no, I want you to verify it yourself. I want you to run the numbers on your own node and find out how many there are. And let's cross-reference and see if anybody gets the same answer. And nobody did get the same answer, which drew into question, well, who are you trusting to run those numbers for you? which kind of pointed out the lack of auditability with Ethereum,

or at least the difficulty in doing so for regular people, and the ease with which an individual running a Bitcoin node can do so, which then spurred this. Basically, the idea was at Block 650,000, coordinated across the network, anybody running a node that wants to partake, can audit Bitcoin at that block, see how many Bitcoin exist, and then compare the numbers.

Run the numbers, compare them, don't trust, verify. And so I'm going to quickly show you how to do this. So I run MyNode. And so I'm not starting right from the main, the main, I guess, dashboard of MyNode. But effectively, if you go into Bitcoin, there's a little Bitcoin app, you go in there, and then you click on a button that says, C-L-I, it brings you to this. Okay, now I've already run the numbers. I just did this as a test previously,

but I just want to show you how to do it in here. So really, all you need to do, there's a simple command, and you type it and you hit enter. But to find that command, if you don't want to risk screwing it up, you just type help here, and you hit enter. This is going to give you a list of possible things you could type. And so what you're looking for, if you scroll to the very top,

There's a section that says blockchain. And you look down the list and there's a command that says, this one is called get-TX outset info. Okay, and all you need to do is copy it, paste it down below and hit enter. And now your node, I'll scroll to the bottom, I just put that in and hit enter. My node now needs to do some calculations

that needs to check the data and see a lot of information about Bitcoin and how many exist. We will get that number in a minute. I'm going to drag this all the way to the end. It would be very similar if you're running Bitcoin Core. You can go into the command line and type the exact same thing, let it do its thing for a few minutes, and you will get an answer back as to how many Bitcoin exist.

So we'll come back to that a little bit and see just kind of how easy it was to just type something and hit enter. Okay, let's move into some bullish news. So this from the Bitcoin Times or BTC Times, again, technical and fundamental evidence hint Bitcoin is at early bull stage. So according to Philip Swift, a Bitcoin analyst and creator of Look Into Bitcoin.com, sufficient technical and fundamental evidence, hint Bitcoin is at an early stage of a bull market. Swift cited the spent output profit ratio or SOPR indicator, of GlassNode to suggest a bullish trend might soon materialize.

The optimistic technical indicators coincide with strengthening fundamentals. As the BTC Times reported, Bitcoin's hash rate and mining difficulty of Bitcoin recently hit a new all-time high, indicating an overall positive market sentiment. So using on-chain data, the SOPR indicator evaluates the market sentiment by analyzing addresses on the Bitcoin network. If the S-O-PR value rises above one, this means Bitcoin investors are sitting on profits. But if the S-O-P-R value falls below one, it shows that people are underwater with their holdings. When investors sell Bitcoin at a loss, especially after a strong, extended rally, it could indicate that weak hands are being shaken off. It might also show that

investors are reluctant to sell Bitcoin at a loss during a bull trend because they expect prices to increase. From March 13th to August 17th of this year, the price of Bitcoin rose from $3,596 to $12,500 on Bitmex. Following the 250% rally within merely six months, Bitcoin pulled back from 12-5 to 10-3. The minor correction of around 17.6% could have caused weak, hands and led to some retail investors to sell, resulting in the SOPR to drop. But analysts often argue that investors selling at a loss could mark the start of an accumulation phase as it means some investors are capitulating. Swift explained. SOPR is dipping below one right now. In bull markets, this is a buy-the-dip opportunity.

I believe there is sufficient technical and fundamental evidence to suggest we are in the early stages of a bull market right now. So the researchers at Glassnode also explained that SOPR could drop below one regularly during bull markets. The quote here says during Bull Runs, the market quickly corrects prices which drive the SOPR value below one, i.e. prices, which mean people are selling at a loss. This is likely due to increased confidence that prices will continue to rise during a bull market, so it would be irrational to sell at a loss when gains are imminent, the research is noted. So this is all predicated on whether or not we're actually in a bull market.

You know me, I'm always very, very bullish long term, and I try not to time ins and outs. I just gradually accumulate. But this SOPR indicator, if it was a bear market and it was below one, it's going to keep continuing to be below one because lots of selling is occurring. But in a bull market where you're kind of in a, an extended bull rally, those dips and the SOPR going below one could indicate a good time to accumulate a little bit more. So we shall see. Again, DCA is your friend, dollar cost average,

because then you kind of take the emotion out of it, but interesting to see nonetheless. Now moving on here to another story from Coin Telegraph. They're talking about Bitcoin versus gold, the ratio there. It just snapped out of a three-year bear market. Okay. So, Bitcoin may soon decouple from traditional assets, says statistician Willie Wu, as a key gold relationship breaks out of a long-term downtread. In a tweet on September 25th, Wu forecast that Bitcoin would act like a successful startup in accruing new interest and going its own way. Adoption, he argued, would follow a classic S-curve pattern much in the same way that a

startup grows. This would take precedence over investors looking for a hedge against other assets. quote, Bitcoin will decouple from traditional markets soon, but driven by its internal adoption S-curved, think startup style growth, rather than changes in perceptions as a hedging instrument by traditional investors. Fundamentals of user adoption have already broken all-time highs. And it shows here there's a chart of a long-term downtrend of the ratio of Bitcoin versus gold, which has now been broken above, and it actually went down to re-meat that line, bounced off of it indicating that we could see further upside from here in relative terms to gold.

So whatever Bitcoin does if this line holds, or rather whatever gold does, Bitcoin would outperform this as long as this line were to hold. So anyways, um, interesting. Again, like Bitcoin when it gets on a crazy run, yeah, absolutely. You can easily outperform gold. But is that happening now. Time will tell. Of course, I very much think this feels like the, it's very reminiscent of 2016 right now and just sentiment things kind of building and kind of coming to a head. It feels like 2016 bordering onto 2017 the same kind of things and sentiment and excitement welling up and interest from people that weren't interested before. So we shall see. Let's hope that this next year very much mirrors what happened in 2017.

Anyways, moving on, I have two side-by-side things I want to refer to here and then kind of draw it into a focal point, kind of a point to the whole thing. Anyways, the Russian Ministry proposes criminal charges for failure to report crypto tax. Russian Ministry of Finance is continuing to push regulations for the cryptocurrency industry by proposing new tax requirements. the ministry now reportedly wants to introduce criminal liability for failure to declare taxes on crypto, including prison terms of up to three years. According to a September 24th report, the ministry proposes that individuals who fail to report

an amount of over one million Russian rubles or $13,000 in annual crypto operations should serve a three-year prison term or hard labor. The ministry also proposed major fines for smaller unreported amounts. As such, any physical or legal entity in Russia would have to report their annual crypto income if its amounts exceed $100,000, which is around $1,300. Failure to report such amounts are subject to fines of 30% from the total amount of crypto assets held, but no less than 50,000 rubles, which is around $650.50. bucks. Again, this is like an upcoming bill. It's not yet in action. But I want to contrast here

to something out of Israel. Israeli draft bill would nix hefty capital gains taxes on Bitcoin. So the members of the national, uh, Israel, Israel Bitcoiners take note. A handful of Nesit members are seeking to ease Israel's hefty taxation. on cryptocurrencies. So this draft bill would effectively end Israel's 25% capital gains tax on Bitcoin by redefining certain distributed digital currencies as currency instead of a taxable asset. So this proposed redesignation applies to cryptocurrency. So not all cryptocurrencies, but these are the designations. It has to be a distributed issuance network. It has to have a $1 billion shekel or a $288 million market cap or more. It has to have a general use purpose and it has to be an independent origin story.

So I look at that and I think, well, Bitcoin, but they're saying that it might apply to more than just that. Now, this regulatory clarity will create commercial certainty and allow more digital currencies to enter the Israeli market. The law markets wrote in their proposal. Defining cryptos as currency would simplify Israeli Bitcoiners tax burden and make qualifying coins a more attractive payment mechanism according to the measure. Now again, this is not yet passed. It's unlikely to pass without the backing from members of the majority, but we shall see. The reason I wanted to bring up both of these stories when it comes to clamping down versus easing is it very much relates to a book I read this year that I love. A lot of Bitcoiners

are heavily loving called the sovereign individual. Okay. And so this book was written in the 90s and very much foreshadowed a lot of the stuff that we actually saw with the rise of a more digital world over the past two decades. And very much guessed and kind of predicted the rise of something like Bitcoin, a digital currency that could not be overshadowed by the state. But the interesting part that they started talking about is the idea that the digitization of society and also the introduction of a digital currency would very much reduce, if not destroy the power of nation states over their constituents and that you would start to see nation states start to kind of try to appease their constituents or like almost advertise their services to potential

candidates to move to their constituency. And so you now see, you now see. see things like this happening, although not on a large scale, but you see the kind of dichotomy between countries that are saying, hey, we're going to clamp down on this. You have to tell us everything. If you don't tell us, we're going to take 30%. If you do tell us, we're going to still take our cut. And if you really lie big time, we're going to throw you in jail. And then you have the contrast of that saying, hey, maybe we should get rid of taxes on this. So more people come here with their capital. So yeah, you very much have very different approaches from different areas of the world, but you do start to see the possibility of people starting to jurisdiction

shop, which is exactly what the book talks about over time, how people will say they won't look at as government as, well, I just have to do what they say. They'll look at it more as what's attractive to me and where do I want to be? And so in a digital world, I think that's very much a possibility. But hey, who knows? Who knows? But nonetheless, very interesting book, I recommend you to check it out. Now, kind of in the same vein of regulatory bodies. Let's talk a little bit about the SEC and a Bitcoin ETF. Now, this has been tossed around forever. We were talking about it on the show earlier in the week. But I very much think that as we move into a potential new bull run, that an ETF approval could be very much on the horizon in the next year to 18 months. Now, I don't say this as it will be caused

by the bull run. I think it's more of a question of, I feel kind of this swell of the stars aligning. And a lot of the good news tends to just happen in the midst of an already existing bull run. I don't know. Things just tend to align that way. I get this feeling that it could be that way again. Anyways, I'm going to read a little bit here and just kind of dive in. In a virtual fireside chat with the DC Bar SEC Commissioner Hester Pierce criticized the commission's longstanding resistance to a Bitcoin ETF. moderator Ashley Ebersoll asked about the SEC's highly public dissatisfaction with a long series of Bitcoin ETF proposals in the U.S. Pierce, who is often known as a as CryptoMum, responded with opposition to those rejects. Quote, I've been pretty outspoken about my disagreement with my colleagues on disapproving some of these exchange traded products. Bitcoin is not uniquely volatile as a base

investment for an exchange traded fund, Pierce argued. I would like us to look at how we've looked at similar products in the past. Many other products that have been, that we have are based on products that are messy. She continued, you can still have an orderly product built on top of it. Now, somebody from Gemini trust continued along the same line of questioning as to what the SEC's concern with a Bitcoin ETF is. Pierce answered, you can't assume that markets are not

going to function if they're not subject to the exact same sort of regulation as securities markets are. I do think that Bitcoin markets are mature. There's a lot of money in there now. There's a lot of very sophisticated players in the space and there's been a lot of work done to regularize

the trading with Bitcoin particularly. I would say that the markets are mature enough to build something else on top of. Yeah. And again, she's, Hester Pierce has been a, not particularly thrilled with the fact that the SEC has continued to reject Bitcoin ETFs. There's been a ton of people that have come out with proposals to get an ETF listed and they've just been smacked down time after time. Some of them were very well flashed out and the reasoning from the SEC was spotty at best. But I do think we're going to see that turnaround in the next year and a half or so. I could be totally wrong, but hey,

let's, let's see. Let's check in on our node. Let's see. Let's see what happened here. Anyways, okay, here we go. So we have a number right here. Total amount. There are, what is this, 18,49,654.62744-4-1-1-1-1 Bitcoin in existence. Anybody that would have checked that in the same block, I imagine, would get the same answer as myself. But hey, we'll find out in a few blocks when everybody audits all at the same time. Exciting to see, though. I'm very excited for this audit. So if you're looking to audit, if you're running my node, then, yeah, just go into the Bitcoin app, click on CLI, and then type in GetTX Outset Info.

And wait a couple minutes. You'll have your answer. but wait for block 650,000 okay anyways I wanted to finish up with one other thing here I've been reading this book it's called the mandibles and it's fiction and it's based in a world where the US goes into hyperinflation

because the world goes off the dollar standard and creates something called the Bangor which is more of like an international currency because they don't trust the U.S. not to inflate their currency, which they obviously have been doing. And, yeah, so the U.S. goes into hyperinflation, and then they go and they default on all their debts as well. And it's like the fallout of this family that was expecting an inheritance,

but that inheritance is now effectively worth absolutely nothing because of the fallout of everything that's going on. I'm only, I'm like four or five chapters in. I love this book. I don't read a lot of things. fiction, but I'm super stoked about this book. I'm very excited about it. I'm having a lot of fun with it. Now, who knows the rest could be crap, but from what I've read so far, it's good. It's good. I really, really like it. So if you're in the market for a fiction book, maybe check it out

because it's a lot of fun. Anyways, guys, I'm going to wrap up there. Thank you so much for watching and or listening. If you're here on YouTube, do remember to hit like, subscribe, and share. All of those things really matter so much. So please do them. They really help. Now, if you want to help it in another way, you can hit the sponsors I mentioned down below. Ledin, remember they got that the B-2-X offer right now. Crypto cloaks, you can grab some awesome swag there. And of course, there's the Kobo Vault. And remember, they got the giveaway.

So retweet the show, tag us both and let us know why you want one. And outside of that, if you really loved what you saw, you can drop me a Bitcoin Lightning Network tip at my tippin.me page. That is t-I-p-p-in-me. slash at BTC sessions. And with that, I'm out. Have yourselves a wonderful evening, a wonderful weekend, and I'll see you next time for your daily session.