BTC Sessions - WallStreetBets Captures The Ethos Of Bitcoin ep142

Starting point is 00:00:30 Wasabi wallet and fairly private. What's going on, everybody? It is a crazy week, an exciting day. There's some interesting stuff going on if you haven't heard what's going on with the Reddit forums and Wall Street bets and the shutting down of trading of GameStop and all of this. And I guess the hypocrisy in legacy financial markets being. thrust into the spotlight. We're going to dive into that today. We're going to do some chatting about that because it's wild. And it needs to be addressed. I was lucky enough. I jumped on earlier with

Starting point is 00:01:17 Leah Helpern. So if you haven't seen that, I tweeted that out. You can check that out. Also, I have an extra show coming out later tonight. I just got to edit it together. But I got together with Gigi, the host or the author of 21 Lessons, Absolute Legend, and we dove even deeper into the implications of Wall Street bets and what it means as a whole, but also kind of how it links up with Bitcoin and the ethos. I'm going to be talking a bit about that here, but for a deeper dive, keep your eyes peel because that's going to be dropping later tonight too. Anyways, guys, super excited for today's show. Already there's like 70 plus people in the chat and watching live. Smash that like button. Give this a share. Let's get this thing rolling.

Starting point is 00:02:03 I am Ben with the BTC sessions and this is your daily session. All right. So again, thank you guys all for being here. Of course, very excited to get this thing rolling. Now, before we dive in, let's take a look at the markets and where we're at. And again, we're getting already close to 100 people watching. Smash like. Give this a share. exciting day. We're sitting around $33,380 per Bitcoin. A single U.S. dollar will now grab you. I just watched it tick below 3,000 sats. So 2,996 sats and dropping. So stack those stats while you can. 88.63% of all Bitcoin have been mined, and that'll be 90% by the end of the year. And in terms of getting transactions through, if you're looking to get through in the next block around 82 sats per byte will do you.

Starting point is 00:03:13 If you're willing to wait an hour, you can pretty much cut that in half, 38 sats per byte. Yeah. So let's, but also before diving into the show, of course, quick shout out to sponsor the show, Lendon.io. You can use your Bitcoin for a variety of different services there. I've used them, especially when I need to get my hands on dollars and I don't want to sell my Bitcoin because that's taxable. And I'm worried about having a buyback and at a higher price.

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Starting point is 00:04:14 I love it. It's 100% air gap meaning you never plug the thing into an internet connected device. Everything is done via QR code, keeping the keys to your money safe and offline, super easy and intuitive to use. And it works with all of my favorite wallets. One's like blue wallet, which is my go to on mobile was sobby on desktop. Love the thing. Check it out. Links below.

Starting point is 00:04:34 I'm using the pro. It has the fingerprint scanner and the rechargeable battery. Of course, I'm all in on Bitcoin. I live on Bitcoin and one of the things that helps me do so is bit refill. They just have every possible gift card you could imagine and they accept Bitcoin on Main Chain and Lightning. So check them out. You can also earn SaaS back as you use Bit Refill, which is why I love it. And finally, if you're backing up a wallet, whether it be software or hardware,

Starting point is 00:05:00 you might want to have it on something a little bit more sturdy than a piece of paper because a piece of paper is susceptible to fire damage, water damage, or you might accidentally throw it out, not so with a piece of steel, fireproof, waterproof, and you're probably not going to accidentally throw it a solid piece of steel. So head over to PrivacyPros.com to check them out. Let's dive in what is going on. First, in regards to the market really quick before we dive into Wall Street bets, I just want to kind of bring people back and realize historically what bull runs have looked like, especially like 2017 because it's feeling very similar.

Starting point is 00:05:41 So before we talked about 2017 in one of my past shows, there were regularly pullbacks of around 40%, 38%, something like that, throughout the market, throughout the entirety of the bull markets. That happened actually seven times through the 2017 bull market. Now, it's also worth noting the length of those pullbacks and how long it took us to get back to the previous. all-time high. And this tweet here actually shows the days between all-time high to new all-time high. Now, this tweet is a few days old, a couple days old, rather. We are sitting around,

Starting point is 00:06:24 getting close to around 20 days since we hit that previous all-time high. And you can see from the early stages of the Bull Run in 2017, it averaged, you know, around 50 days or more to get back to the previous high before we started a new run. If history rhymes, then we could be looking at something similar. So again, I said we're about 20 days in now to this pullback. If history rhymes, it could only be a couple of weeks before we're seeing us start to peek back to where we were and beyond. So who knows?

Starting point is 00:06:57 Time will tell if that's the case. But things are seeming pretty similar to last run. So we will see. But holy crap, let's dive into this. What is going on with GameStop and Robin Hood and just everything? Okay. We're going to read a little bit about this. This is on Vox.

Starting point is 00:07:17 Now, as far as their takes on it, we'll kind of see here, but we'll get an idea of what's happening. So day trading, individual investing, they've boomed over the past several months. Of course, a lot of people discussing this on forums like Reddit and using things like Robin Hood to do so. Now, small-time investors trade a lot, sometimes to the annoyance of, you know, traditional institutions, but are these really consequential actions? In the Game Stock saga, at least the answer is yes. An army of traders on Reddit forum, Reddit slash or R-Sash Wall Street bets helped drive

Starting point is 00:07:59 a meteoric rise in GameStop's stock price in recent days, forcing it to halt trading multiple times in causing a major headache for the short sellers, betting against it, and banking on the stock falling. Yeah, it's, it is, they say it's kind of like a David and Goliath story. Now, let me kind of dive a little to what was happening here. A bunch of hedge funds that have a lot of money looked at GameStop and said, we are going to short this, which means they're betting that the stock price will drop. Now, they didn't just do that.

Starting point is 00:08:35 They bet so much that the amount of their bets added up to more than the entirety of what the company was worth. In fact, 40% beyond that. They had 140% leaver or 140% bets that GameStop stock would drop, which means they were hilariously over leveraged and exposed to the risk if it happened to go up. And guess what? The regular pleb on the street and a bunch of bros on Reddit figured this shit out and said, these are the same guys that typically have no consequence like in 2008, where they are allowed to privatize the losses or they privatize the gains. So when things are going up and going in their favor, they get to keep all those profits. But what happens if they're losing money? Well, as seen in the past, they get bailed out. They get bailed out by the banks and by the central banks.

Starting point is 00:09:36 People will just print the money and make them whole again because they're too big to fail. So who foots the bill, effectively all of us, right? Anybody who's a taxpayer, anybody who uses the currency that has been debased to make these people whole again because they wanted to gamble with other people's money. Well, these guys said, scrum, we are going to buy up the stock. so that it rises. Now, people have different reasons for doing this. Some people, you know, maybe have a soft spot for GameStop. Some people saw momentum trade and wanted to jump on it.

Starting point is 00:10:08 Some people just outright wanted to see the hedge funds fail. And there's a fair amount of that sentiment going around. Regardless of that, people bought the stock and it started going up. And the hedge funds started losing lots of money, billions of dollars. and multiple times through the trading day, they halted trading of GameStop and other other same shorted type companies like AMC and others, halted trading so that it would stop going up

Starting point is 00:10:40 so that these hedge funds could kind of mitigate their risk and reallocate. It kept on happening. And what happened? What came of that? Well, effectively, people were making just money hand over fist, if they had bought game stock stock and they were making off like bandits and hedge funds were losing money and they were pissed. So a few things happened.

Starting point is 00:11:07 Number one, they had a Discord group, which if you're not a Discord, it's effectively, you can have group messaging and discuss things in there. It's telegram similar kind of thing. Anyways, that got shut down for quote unquote hate speech. The Reddit forum temporarily got. taken down. It's been reinstated since I believe. You saw people basically kind of being deep platformed now instead of for the reasons we've seen in the past, now for talking about buying something that went against the grain. Okay. Furthermore, you saw today Robin Hood,

Starting point is 00:11:49 which is the app that most people are buying the stock through, delist GameStop and not allow people to trade it for the safety of the market and for the safety of traders, which is total bullshit, in my opinion. People should be able to freely do what they like with their money and buy whatever they like, especially on an individual level when you have people, everyday people like you and me that just have like a few hundred bucks sitting in an app and they want to purchase some stock. But they said no, the people at the top are losing money. So we shall revoke the ability of you to sell. You know what they did leave, or they revoke the ability of people to buy.

Starting point is 00:12:31 You know what they did leave, though? They allowed people to sell. So it was a one-way trade. They said, listen, you're not allowed to buy any more of this, but we'll allow you to sell it if you want to do that. You know, why? Because if it goes down, then the hedge funds are still making money. It blows my mind, and it has shone a giant beacon of light on the double standard in which

Starting point is 00:12:54 we live that the people at the top can basically gamble with other people's money. There's been a lot of talk about, oh, well, they were colluding to move the stock price. Hedge funds do that all the time. They call them idea dinners and the hedge funds get together. There's been investigations into this kind of stuff, but it basically went nowhere. They'll get together. They'll discuss stocks that they like. And you know what's happening.

Starting point is 00:13:22 They're basically coalescing on, hey, we're all going to agree. to purchase this or short this or whatever it may be. They can do that all day long. What's happening now is that other people, the outsiders, so not insider trading, outsider trading in full display of everybody, people saying, we're going to openly let everyone know that we're going to buy this particular stock and they've been shut down. So the rules for some do not apply to others.

Starting point is 00:13:51 And yeah, so it's it's kind of just shines this light on the complete disconnect and the complete double standard that we're seeing nowadays. This very much lines up with the ethos of Bitcoin. Now, the difference here, in my opinion, is that not everybody that is realizing how rigged all this shit is have yet gotten to far enough down the rabbit hole to kind of recognize the systemic problem that allows this kind of a system to proliferate. So let me just read a little bit of a quote that was seen an open letter to CNBC. And again, part of this may be perhaps a little disingenuous because I don't know how much people actually view the value proposition of GameStop, given the model. But regardless, before you spend another day hosting your Schill hedge fund buddies to come, come on the air and demonize Wall Street bets.

Starting point is 00:14:56 I hope you read this. I keep thinking about these funds that are short GME like your boys at Melvin Capital, your coverage of this subreddit, and I'm getting matter and matter. These funds can manipulate the market via your network, and if they screw up big because they don't even know the basics of portfolio risk 101 and using position sizing, they get a bailout from their billionaire friends at Citadel. Then they have the nerve to turn us into public enemy number one just because we believe in an underdog company getting a second chance.

Starting point is 00:15:25 Now, that's the part where I'm like, I mean, I think GameStop just happened to be in the middle of a bigger problem with these hedge funds. But that's beside the fact. Anyways, we don't have billionaires to bail us out when we mess up our portfolio risk management and a position goes against us. We can't go on TV and make attempts to manipulate millions to take our side of the trade. If we mess up as bad as they did, we're wiped out and have to start from scratch and then come here and post our losses. Seriously, motherfucker these people. I sincerely hope they suffer. We want to see the loss porn.

Starting point is 00:16:05 I mean, you got to laugh. You got a laugh at the sentiment, like, and that it worked. Losses, I've seen some articles quoting 70 billion lost. that's insane and some are starting to make the connection. This account now has, oh my God, it's grown so much, 624,000 followers on its way to a million. Recently, it was like a few thousand. Elon Musk liked one of the tweets out of this account. It's called WSB or Wall Street Best Chairman.

Starting point is 00:16:45 The guy tweeted out, they can only control us because we use. their currency. And here's the rub. Here's where I see the connections getting made. And this is what, again, I'm going to do. I'll release the interview video with Gigi later tonight. We talk a lot about this. But the systemic problem is in that these funds and these people that are higher up can be bailed out in the first place.

Starting point is 00:17:14 So when somebody has control of the measuring stick, the money itself, what is meant to measure value in our economy, they can skew where the value lies. They can create more money and give a higher percentage of the total wealth of an entire economy to whomever they please. And that's what happens because you have these huge funds that are gambling with other people's money and they're saying, we want to make all the risky decisions that we've always made. If it goes well for us, we're going to keep the money.

Starting point is 00:17:48 If it goes poorly for us, we want to bail out that's covered by the taxpayers, whether directly or indirectly through inflation. And that's how it's been. It was very overt in 2008. It's way more overt now. It's in everybody's faces. And so these guys are starting to make the connection. I can't wait until this starts to proliferate and people start to kind of have that. aha moment of, oh, we've been attacking the symptoms. We haven't been attacking the problem yet.

Starting point is 00:18:24 And the problem is the currency itself because it drives these behaviors. It drives hedge funds to take these risks that because they know that at some point, some of these institutions are too big to fail and they'll just be bailed out with these shrewd bucks. So anyways, and interestingly enough, even some institutions are, recognizing this, they're recognizing that the dollars are the chink in the armor and the risk to hold on to. That's why they're they're piling money into into the stock market. That's why we're in the middle of a global lockdown with everything shut down and we're still seeing all time highs in the stock market. That's it's systemic in the issues that are at hand here. So as I said, some institutions are recognizing that. And they're hedging their bets in terms of the dollar. And they want to almost have an option as an inflation hedge. And so you see, NASDAG listed Marathon Patent Group buys $150 million worth of Bitcoin as part of the company's treasury reserves. We've seen

Starting point is 00:19:37 lots of this over the past year. It's continuing and continuing and snowballing over time. So NASDAG listed Marathon Patent Group announced Monday. It has purchased around $4,813 Bitcoin for about $150 million. The investment is part of the company's Treasury Funds. Marathon CEO Merrick Okamoto told the block. This is the first time the company, which is involved in Bitcoin mining, has bought Bitcoin from the market. Quote, by leveraging our cash on hand to invest in Bitcoin now, we have transformed our potential to be a pure play investment into reality. We also believe that holding part of our treasury reserves in Bitcoin will be better

Starting point is 00:20:17 long-term strategy than holding U.S. dollars similar to other forward-thinking companies like micro strategy, which famously kind of led the charge on this. Now, I will say I'm not a big fan of Marathon Patent Group. These are the guys that have been talking about clean block mining, saying that they'll exclude any Bitcoin transactions that they mine that don't meet their sniff test for being clean, which is just going to put them at a market disadvantage and people across other parts of the globe will mine them. I would venture to say that these guys will be at a heavy disadvantage in the coming years, but they might be okay this year because of the direction of the market. Now, on the other front, this is interesting. Pakistan government funding

Starting point is 00:21:08 two Bitcoin mining farms, like an actual nation state funding this. Interesting. The Pakistan government is to fund two state-backed Bitcoin mining farms in, I'm not going to try and say the name of that province. According to local press, KP advisor for information technology, Zula Bangash, said the provincial government had passed a new law approving the release of funds needed to establish a mining plant. The news that the local government there is backing a Bitcoin mining plant comes just a month after the KP assembly was the first in the country, to legalize Bitcoin trading and mining in Pakistan. The province will be mining Bitcoin for profit,

Starting point is 00:21:47 and it is hoped the proceeds will energize the local economy. This kind of some of the first forays for an actual nations getting into the Bitcoin game. And you got to wonder if it starts to, the game theory starts to play out where people are trying to corner the market and get their little piece of the pie. I'm excited for this. I think these are just the first inklings of it and you may not see a lot of this, especially like over the next year.

Starting point is 00:22:21 You'll see more than you've ever seen because you haven't really seen it before. But I think it's going to take four or five years to really start to see this proliferate. And at that point, you know, Bitcoin would be so much larger if that was the case when you get full nations actually mining Bitcoin for profit. Now, Valky Digital Assets files for Bitcoin ETF. So, you know, ETFs have been on the radar for some time. They've historically just been tossed out and not approved with the previous SEC Commissioner, but we've got a new one incoming and he's a little bit more forward thinking and a little bit more open to the idea.

Starting point is 00:23:02 So we could see that change very soon. So I'll just read a little bit here. Valky Digital Assets filed an application on Friday for a Bitcoin Exchange traded fund or ETF, the second such filing in the past 30 days. The Valky Bitcoin Fund would be listed on the New York Stock Exchange and Coinbase Custody Trust Company LLC. They would serve as the custodian for the proposed ETF according to Dallas registered Valkyrie investments, the parent of Valky Digital Assets.

Starting point is 00:23:31 Leo Wald, the CEO, told CoinDesk, quote, our executive team has previously launched multiple ETFs, publicly traded funds, and ETPs. exchange traded products, including Bitcoin funds. I honestly think that this is probably the year where you see a Bitcoin ETF actually come to fruition. And that'll be interesting because the implications of having something that was meant to kind of undermine legacy finance, starting to integrate into legacy finance is kind of like the Trojan horse of the century. because at that point it becomes very, very difficult to say it's not allowed anymore,

Starting point is 00:24:13 but what could happen is something like executive order 6102, which was the presidential order to confiscate gold and have it in state possession. That could possibly come about if Bitcoin did well enough that it was actually a threat to national currencies. We'll see if that ever plays out or when that plays out. Again, I talk about this a lot with Gigi, so I don't want to spoil that conversation, but look for that episode tonight.

Starting point is 00:24:46 Very interesting kind of line of thought to go down. Now, on the other hand, we have Grayscale, and, you know, these guys offer a Bitcoin fund, grayscale investments, and they allow people to get exposure to Bitcoin. is kind of one of the only ways in the U.S. right now where you can easily get exposure to Bitcoin via a traditional investing vehicle. But Grayscale Investments, the world's largest digital currency asset manager, has made an incredibly

Starting point is 00:25:17 generous donation of $1 million to support Coin Center's policy advocacy mission. In addition to that, Grayscale has offered to match any donations made through February up to an additional $1 million. Yeah, and so the donations here go toward general operations and growing our reserve in case we ever need to engage in expensive litigation or advocacy campaigns. So Coin Center, they're very much put together so that they can kind of fight fire with fire. So when there's bad regulations coming down the pipeline, they're the guys that actually try to go the traditional route, get in front of Congress, get in front of the house,

Starting point is 00:25:57 and make their case as to why it's a terrible idea and why it's going to hinder innovation. So happy to see them receiving some money. Cudos to Grayscale for doing so. And if you're looking at donating to them, you can check out links in the description for this particular article. Now, also, we have just so much going on. Harvard, Yale, Brown endowments have been buying Bitcoin for at least a year, according to sources. So some of the largest university endowment funds in the U.S. have been quietly buying cryptocurrency for the past year or so through accounts held at Coinbase and other exchanges CoinDesk has learned.

Starting point is 00:26:36 According to two sources familiar with this situation, Harvard, Yale, and Brown, and the University of Michigan, as well as several other colleges have been buying Bitcoin or crypto directly on exchanges. Several Ivy League endowments took an interest in blockchain technology via crypto-focused venture capital funds back in 2018. Quote, there are quite a few, said a source, who asked to remain unnamed. A lot of endowments are allocating a little bit to crypto at the moment. Yale and Brown did not respond to request for comment and by press time. When reached by CoinDesk, the Harvard and University Michigan endowments declined to comment. So they neither confirmed nor denied. Coinbase also declined to comment.

Starting point is 00:27:21 University endowments got a single mention in Coinbase's annual report for 2020, but without naming any names. Seems like everybody's kind of starting to see the writing on the wall. Now, in terms of regulation, back in December, we saw the previous administration and Steve Mnuchin, head of the Treasury, tried to cram through some onerous regulations in terms of people that use their own wallets, and pulling money off of exchanges to their own wallets and requiring just an onerous amount of personal information to do so, such that it would very much compromise the safety and privacy of a lot of people by ramming that through.

Starting point is 00:28:02 They tried to do it kind of like in a course of two weeks when normally you would have comment periods of months at least. Luckily, that has been put off. Now, don't go saying, oh, the Biden and the administration, must be on top of this and know that it was a bad idea. Biden kind of just put a stop to everything that was happening with the previous administration, and it just so happened that this FinCEN comment period got extended with that. So don't take it as a stamp of approval.

Starting point is 00:28:33 Just take it as, hey, we bought a little bit of extra time to make a case as to why this is a bad idea. Yeah. So all in all, pretty good. And the last couple of things I wanted to touch on here, I'm very excited to see the proliferation of lightning network being rolled out to where it matters, which is exchanges. So if you've been on exchanges lately, depending on the one you're on, you might find that withdrawal fees for Bitcoin are high. And what they're doing is they're trying to highball it so that

Starting point is 00:29:00 when they pay the on-chain fee, that they cover their asses, especially if they're not batching, which means sending out to a whole bunch of people at once in a single transaction. What we're seeing now is exchanges start to realize, oh, this is actually costing us a lot and it's deterring customers if we're not batching transactions and giving them options for withdrawals that are efficient and cheap. And so you see OKCoin. They're integrating Lightning Network. It says cryptocurrency exchange OKCoin has announced that it will be integrating Bitcoin's Lightning Network to enable faster and cheaper transfers for users by running a Lightning Node that can represent. transactions to other nodes in the network. It expects the integration to be complete in three to four weeks.

Starting point is 00:29:45 So cool to see there. And then also you have VBT, which is Vietnam's oldest Bitcoin exchange. They've taken steps to ensure that their clients are still able to take custody of their purchase Bitcoin without necessarily paying an arm and a leg to transfer them out. They're doing this by batching, again, transaction batching, which should be common practice. They're also integrating Lightning Network. So again, kudos to these guys to catching up to the bleeding edge of what's actually happening. We see crack and integrating stuff like this.

Starting point is 00:30:20 We see other exchanges integrating it. I believe BitFNX as well. So yeah, great to see. I hope to see even more of this in the future. So guys, given that I have another show coming out later tonight, I got to still edit that and put it together. I will wrap that up here. So there's my news roundup for the day interview coming tonight with Gigi, author of 21 lessons. Now, thank you all for being here.

Starting point is 00:30:46 Of course, there's over 100 people here. Smash that like button. Give it a share. Subscribe if you're not already subscribed. Of course, if you want to help the show in another way, you can hit up the sponsors. I previously mentioned down below that was Ledon, Cobo, BitRefill, and Privacy Pros for the Bill Fonel, the metal backup of your seed. And finally, if you really liked what you saw, you can always drop me a Bitcoin Lightning Network tip at my tipin.me page. That is t-i-p-p-p-in.me slash at BTC sessions.

Starting point is 00:31:17 With that, I'm out. You guys rock. I will see you, I guess, tonight later for your second daily session.

BTC Sessions - WallStreetBets Captures The Ethos Of Bitcoin ep142

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