The Breakdown - LFG! Bitcoin Clears $66K and Hits New All-Time High

Starting point is 00:00:00 The TLDR there is it seems like we're hitting this all-time high with long-term holders buying in rather than cashing out near the top. It also seems like the full spectrum of retail right now isn't in yet. And here we are at 66,600. It's pretty exciting times. Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the Big Picture Power Shifts remaking our world. The breakdown is sponsored by Nidig, and produced and distributed by CoinDesk. What's going on, guys? It is Wednesday, October 20th, and here we are. I woke up this morning to some serious coiled energy in the markets, and you know why.

Starting point is 00:00:49 When I started prepping this episode, we had been on the precipice of a new Bitcoin all-time high for about 12 hours, and everyone was waiting for what felt like the inevitable. Now remember, the previous all-time high was just under 65,000. It was 64,800 to 64,900, depending which exchange you are on. And the question is, why was there excitement heading into this morning? Why did it feel like we might be on the verge of beating that record? Well, of course, it had a lot to do with the success of the first day of the Bitcoin Futures ETF from ProShare's trading. The ProShare's Bitcoin Futures Etienne, BITO hit around a billion dollars in traded volume yesterday. This made it the second most heavily traded new ETF on record. What's more from just $20 million in seed capital at the beginning of the day, by the end of trading, the ETF's assets were all the way up to $570 million. Now, to give this some historical context, Eric Balcunas, the lead ETF analyst at Bloomberg, wrote, the fastest ETF to ever get to $1 billion naturally was GLD gold in 2004. It did it in

Starting point is 00:02:06 three days. No one has really come that close since. BITO has $570 million after one day and a legit shot to at least tie this DiMaggio-esque feat. In other parts of the Bitcoin ETF market, Valkyrie is racing to catch up. They're trying to move up their launch to Thursday. But as I told you yesterday, the thing that was really going to matter was always whether this ETF had underperformed or outperformed expectations. It was very clear by the time the bell rang that we had exceeded expectations significantly. Now, on top of all that, one of the interesting things to note is that not a ton of the volume was in big institutional blocks. Instead, it seemed to be more retail, more smaller investors. And of course, going into the beginning of

Starting point is 00:02:53 trading yesterday, there was a lot of fear that this was going to be a buy-the-rumor-sell-the-news type event. In other words, the market was going to price in something big, and then when it actually came to fruition and was disappointing, the price would come down. It was when that didn't happen, when instead the opposite happened that people really started to get excited. Last night, UD. Wertheimer tweeted, everyone in the world knows a new Bitcoin all-time high is coming today. Everyone except Peter Schiff. Spencer Schiff, who is Peter Schiff, who is Peter Schiff, son and who is a bitcoiner as opposed to his dad's goldbug wrote, he's burning incense while staring at the price chart and saying incantations in a different

Starting point is 00:03:31 language. It's really weird. Peter McCormick, the host of what Bitcoin did, wrote, Just fucking do it, Bitcoin. Suu of Three Arrow's capital writes, up early, up often, up only. Others, meanwhile, we're talking more about the significance of what a new all-time high would mean in the face of this year's tremendous fud, and just to remember where we're we were just a few short months ago, let's go back to May 22nd. Travis Kling tweeted then, you need to understand where we are in this market right now. We have the literal Pope sneak-dissing Bitcoin. I've got class of 2012 traders telling me this is the most coordinated, multifaceted fud campaign they've ever seen. Fear and Greed Index at 12. What happens if Bitcoin doesn't

Starting point is 00:04:16 die? Travis followed that up perfectly last night with, don't ever forget the CCP and ESG went hammer time on Bitcoin for two months. And as soon as they laid off for a minute, it did a double straight in their face back to all-time high, and now pro-shares launched the second most successful ETF ever, and I'm just curious how all that tastes. Willie Wu reinforced this same point around China, saying, China banned Bitcoin transactions and mining only 150 days ago. Today, the network is more decentralized than ever, and price has risen 50%. Preston Pish shared the Bitcoin chart and tweeted, imagine shooting someone three times, placing their body in a padlock steel container, and then throwing it out at sea, only to find them walking through the front door with a smile

Starting point is 00:05:03 on their face tomorrow morning drinking a cup of coffee. That's this chart, the Bitcoin chart, for Wall Street. Sailor, of course, used his common eloquence and wrote, The Halls of Echernity Echo with the cries of those who sold their Bitcoin. Now, of course, as I was prepping this show, we hit that all-time high. First smashing through 65,000 and then 66,000. And at the time of recording, hovering at 66,656, so close to that beautiful 6666. This podcast is sponsored by NIDIG, and they put out a research newsletter that's one of the best ways to track market insights and track the turning points of Bitcoin adoption. Sign up at Nidig.com slash NLW.

Starting point is 00:05:51 That's NYDIG, forward slash NLW. Others in the market have started to focus on what's next and how it relates to the coming global macro picture. Dylan Leclair tweeted, Let us not forget that there are hundreds of trillions of dollars worth of capital invested around the world based on negative real rates. A decentralized, global, absolutely scarce monetary asset that's native to the internet fixes this. The world is not ready for what comes next. He goes on. Europe has explicitly negative interest rates.

Starting point is 00:06:26 The entire world has implicitly. negative interest rates. Nominal versus real. The cost of capital in the fiat system is irreversibly broken. Now, to the question of whether this is going to cause alarm bells in some governments, Dan McArdle, the co-founder of Masari, wrote, thesis was always that it'd be best to get BTC to societal relevance fast to make it harder for governments to ban, which would only delay things for what it's worth. Now, with advocates in hodlers and Congress and a booming ecosystem that millions of Americans have a stake in, I think we're past the point of no return. Of course, others are really more focused on what happens next from a financial standpoint. No one knows for sure,

Starting point is 00:07:06 however, there are a fair number of people on Twitter who are giving some version of a tweet from Cryptobobie this morning who wrote, still not getting texts from my idiot friends about what crypto they should buy. Plenty of time to run, baby. Here's, however, a little more meat on those bones from Puru Goyal and Bitcoin Tina. They looked at UTXO price distribution, hoddle waves, coin days destroyed, and a bunch of demand-side metrics as well, and I'll give you just a snippet of what they came away with. Quote, what are these long-term hoddlers doing right now? They're not selling. Long-term holder net position change is still in the green, although trending downwards close to neutral over the next few months, but still in the green. Typically in bull runs, you see

Starting point is 00:07:48 long-term holders sell into rallies. We saw the same behavior into our first rally of this cycle. Long-term holders sold as we broke previous all-time highs of 20,000 all the way up to 65,000. They've been accumulating heavy ever since, and that position has not changed. Crazy. Most of the metrics are telling a similar story of supply and demand. Supply is suffocating. Long-term holders are accumulating, although at a slightly lesser rate now. We're at the start of a second run-up this cycle in all likelihood. All said, prices nearing all-time high. Crazy. The TLDR there is it seems like we're hitting this all-time high with long-term holders buying in rather than cashing out near the top. It also seems like the

Starting point is 00:08:30 full spectrum of retail right now isn't in yet, and here we are at 66,600. It's pretty exciting times. As someone pointed out, 100% of Bitcoin supply is currently in profit. Congrats to all hodlers. The Crypto Dog also writes, if it happens like it ought to, there will be a crescendo of good news over the next week's into price discovery. The excitement will get boring, and eventually you'll almost feel sleepy, rich, hopefully, and sleepy. To stay awake the next few months. Look, I don't know what happens next and I don't think anyone else can tell you either. There's going to be a lot of folks who are drawing comparisons now to 2013 and 2017, and that could certainly be. We certainly have many of those ingredients. I do think it's fair to say that there doesn't seem to be the full

Starting point is 00:09:14 spectrum of retail involved yet, at least not from my DMs and text messages and all those highly subjective factors. But I will also say that every bull run is different with its own challenges, its own causes for concern. One thing that I will draw continued attention to is the complication of Facebook's new involvement in this space. Yesterday, as I mentioned on the show, Facebook's Novi Wallet announced that they were going to do a pilot in Guatemala using the Paxos dollar, USDP. That caused the ire of a a number of U.S. senators, Brian Shats, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith, all Democrats, by the way, sent a note ordering Facebook CEO Mark Zuckerberg

Starting point is 00:09:57 to, quote, immediately discontinue the company's pilots of Novi and end its work on the DM's stable coin project. Here's how CoinDest summed it up. The lawmakers said Facebook cannot be trusted to protect user data or manage a payments network, and that, quote, we urge you to immediately discontinue your Novi pilot and commit that you will not bring DM to market. DM for its part followed up and said, DM welcomes the opportunity to engage with members of Congress on the robust controls we have spent two years building into our payment system. Unfortunately, today's letter from lawmakers to Facebook misunderstands the relationship between DM and Facebook. DM is not Facebook. We are an independent organization and Facebook's Novi is just one of more than two dozen members of the

Starting point is 00:10:35 DM association. Novi's pilot with Paxos is unrelated to DM. Now, it takes a lot to get people to defend Facebook on Twitter, but that's exactly what we saw. Airy David Paul wrote, got to protect those big bank oligopolis. Warren postures as anti-bank and pro-consumer, but mostly works to entrench the bank oligopolis against consumer choice. Novi isn't a decentralized cryptocurrency, but choice and competition are good. Now, we could spend a bunch of time talking about how silly it is that these senators don't seem to quite realize the difference between Novi the wallet and DM the project, although one could also argue that they understand quite clearly that there likely isn't as much difference as those projects would

Starting point is 00:11:13 like us to believe. But either way, I bring this up in the context of this Bitcoin all-time high just to remind us that there are many parts of this story yet to be told. In addition to the all-time high, the only other thing that Twitter is buzzing about is that Facebook is apparently planning a complete rebrand to reflect Zuckerberg's growing focus on the metaverse. Who knows what type of regulatory ire that will bring our way? Given that the Libra announcement jump started the entire modern wave of regulatory consternation around stable coins and defy, it's probably worth keeping an eye on. Still, for right now, the story is the clear story. It's the all-time high. It's Bitcoin punching through. It's Bitcoin fall happening exactly

Starting point is 00:11:56 as so many expected it to. It's everything exciting that comes next. Until tomorrow, guys, stay safe and take care of each other. And let's fucking go.

The Breakdown - LFG! Bitcoin Clears $66K and Hits New All-Time High

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