The Breakdown - Trump's $150k BTC Price Target

Episode Date: December 12, 2024

The President-elect is weighing in on Bitcoin, and thinks it should hit $150,000 early in his presidency. NLW covers why during this administration, Trump seems likely to view the price of Bitcoin as reflective of his policies. Enjoying this content? SUBSCRIBE to the Podcast: https://pod.link/1438693620 Watch on YouTube: https://www.youtube.com/nathanielwhittemorecrypto Subscribe to the newsletter: https://breakdown.beehiiv.com/ Join the discussion: https://discord.gg/VrKRrfKCz8 Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

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. What's going on, guys? It is Wednesday, December 11th, and today we are talking about a very interesting Bitcoin price target. Before we get into that, however, if you are enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. Hello, friends. A new Bitcoin price prediction has entered the chat, and this one is from the self-described crypto president. By now, it should come as no surprise that President-elect Donald Trump is keeping an eye on Bitcoin's price, and guess what? He wants to see it go higher.

Last week, when Bitcoin hit 100K for the first time, Trump posted a congratulatory message to Bitcoiners. Taking some amount of credit and winking to his orange-pilled supporters, Trump added, you're welcome. Now Trump thinks that $150,000 per Bitcoin sounds like a good price to him. The news of this specific price target comes from an Axios source who's described as a top member of the transition team. And what makes it interesting is not so much that Trump wants Bitcoin to go higher. It's that he's potentially viewing the price of Bitcoin as one metric of the success of his presidency. The Axiose source said that Trump, quote, is going to be very focused on the price of Bitcoin. It's another stock market for him. Trump was extremely focused

on the stock market during his first term, often tweeting about it almost every week and often tying price action directly to his policies. This report seems to imply that Trump will be glued to the Bitcoin price chart during his new administration. As if this market isn't headline-driven enough, we could also see the president posting about how his policies are driving Bitcoin higher. In terms of a specific timeline, the Axi source says that Trump hopes to see Bitcoin at 150K early in his presidency. The rest of the Trump family are also fully orange-pilled at this point. On stage at the Bitcoin Media Conference in Abu Dhabi, Eric Trump said that Bitcoin is a much better investment than real estate. As the son of a

property mogul, Eric recognized the ability to easily liquidate and store billions of dollars in Bitcoin just can't be matched by commercial real estate. And he had an even larger price target, stating, I am confident that Bitcoin is going to hit $1 million. Eric also claimed that Trump plans to make Bitcoin tax-free, which had previously seemed like a completely unrealistic policy. Ultimately, while it was already clear that Trump had positioned himself as the bag pumper in chief, this news suggests an even deeper level of interest. Moving on today, and I have to say today is a bit of a grab bag, as is to be expected as we head into the holiday season. In a completely predictable bit of news, Microsoft shareholders have voted against a proposal to establish a Bitcoin reserve. The result was

announced last night at the company's annual shareholder meeting, although the vote tally was not disclosed. The proposal had been supported by Michael Saylor, who provided a three-minute video that succinctly made the case for corporate Bitcoin ownership. He said, Microsoft can't afford to miss the next technology wave, and Bitcoin is that wave. The only major reveal from the meeting was the identification of the activist shareholder who made the proposal. It was the National Center for public policy research, a pro-free markets think tank that put Bitcoin on the agenda. They put a similar proposal to Amazon shareholders last week, which may also go to a vote at that company's annual meeting in the spring. It turns out that BlackRock then wasn't

working behind the scenes, although we don't know how the asset manager made their proxy votes. No one was particularly shocked at the news, but Bitcoiners still view big tech adoption as inevitable. Pomp wrote, Bitcoin doesn't care about Microsoft, but eventually Microsoft will will care about Bitcoin. Niko, the host of Simply Bitcoin commented, everyone buys Bitcoin at the price they deserve. See you back in a year or so. Bitcoin analyst Will Clemente was thinking about how far the Overton window has shifted in the five years since he bought his first Bitcoin, tweeting, to take a step back, the fact that Microsoft even had a vote to buy Bitcoin while we have a U.S. Strategic Reserve up in the air is insane. Now, while the micro-strategy strategy might not

being adopted by Microsoft, Bloomberg Intelligence expects that micro-strategy itself will be added to the NASDAQ index at the end of the month. The index is reconstituted annually with the official announcement expected tonight and an effective date of December 23rd. Bloomberg's Eric Balcunis wrote, Micro Strategy is likely to be added to the NASDAQ, Moderna likely to get the boot, which is symbolic. Likely a 0.47% weight, the 40th biggest holding. Balcunas hedged his bet by saying it was only their best estimate,

but noted he doesn't see any grounds for exclusion from the index. In his article for terminal subscribers, Bloomberg's James Safart said, we expect net buying of at least 2.1 billion shares by ETFs to follow, equal to about 20% of daily volume. Joining the S&P 500 will be tougher because of a lack of profit, though an accounting rule change surrounding Bitcoin valuations could make MicroStrategy eligible in 2025. That $2.1 billion worth of buying would be completely price agnostic as asset managers reweight their ETFs. And that's to say nothing of the continuous passive bid from the millions of retirement

accounts who buy a NASDAQ index funds every month. Micro Strategy's inclusion is reminiscent of Tesla being added to the S&P 500 in December 2020. The scale is very different with Tesla already the sixth largest U.S. company at the time. However, market attitudes towards the two companies have a lot of similarities. Tesla was already a despised company among short sellers who lost a massive $40 billion, betting against the stock as it went 7X in 2020. The price rallied hard into index rebalancing, then added a further 32% over the following three weeks. Price action was more subdued over the next few quarters with the inclusion event in the rearview.

Tesla exploded again in the final quarter of 2021, adding 55% in October to reach a then all-time high. Micro Strategy is similarly hated, but the short interest isn't anywhere near as high. It's currently shorted at 12.5% of the overall supply of stock. which means that Microstrategy doesn't rank on the list of the 50 most shorted stocks. Ultimately, no one knows how this will exactly play out, but it should raise the profile of micro strategy even higher and could add to the already massive volatility of the stock. It also carries a lot of symbolism for proxy Bitcoin exposure to be added to millions of retirement

accounts, even with a tiny waiting. Preston Pish wrote, kind of serendipitous that on the day Microsoft doesn't add Bitcoin to its balance sheet, MicroStrategy is named into the NASDAQ 100. Keeping on the theme of Wall Street adoption, Goldman Sachs could soon join the Bitcoin business. During an event on Tuesday, Goldman's CEO, David Solomon, was asked if the bank would consider market-making in Bitcoin and Ethereum. He responded, if the regulatory structure changes, we would evaluate that, but at the moment, we're not permitted to. That comment, of course, refers to SAB-121, which functionally prohibits banks from holding crypto assets on their balance sheet,

constraining market-making activity. The SEC rule is likely to be repealed in the early days of the Trump administration, given it was already rejected by Congress. Solomon added, I do think that these technologies are addressing and they're getting a lot of attention at the moment because there's a view that the regulatory framework is going to evolve as we go forward differently than it seemed like it was going to evolve under the last administration. These assets, Bitcoin, for example, you know these are speculative assets at the moment, but people are very interested in them. I understand why.

Real crisp and concise statement there. Goldman has a long and storied history of on-again, off-again participation in crypto markets. In 2017, their announcement of a crypto trading desk came right at the peak of the market. That desk was mothballed until 2021 when it finally launched, although it's unclear whether a single trade was cleared. Since then, they've participated in real-world asset pilots and built out a 200-person strong digital assets team. The bank has relatively little to show for it so far, but a change in regulation could open the floodgates. Most U.S. banks have auxiliary tokenization projects in the works.

But unleashing the investment banks as crypto-native market makers would be a step change in their participation. Interesting comments from Ray Dalio. The legendary hedge funder is warning of an impendent monetary catastrophe. Speaking at Abu Dhabi Finance Week, he expressed concerns of a potential, quote, pending debt money problem. Pointing to the unprecedented levels of national debt in China and the U.S., Dalio said, It is impossible for these countries to be able to not have a debt crisis in the years ahead that will lead to a great decline of money value. He suggested that investors shouldn't, quote, get too caught up in the twists and turns of

day-to-day headlines and instead think more about the big forces. I want to steer away from debt assets like bonds and debt and have some hard money like gold and Bitcoin. Dalio has been a Bitcoin proponent for the past few years, reversing his previous stance as the asset class grew in prominence. In 2022, he suggested it's reasonable to allocate up to 2% of a portfolio to Bitcoin alongside a gold allocation. We're now at the point, though, where Bitcoin isn't a controversial recommendation from Dahlio that he needs to defend. It simply added alongside gold as a recognized hard asset.

Stack Hodler wrote, Ray Dahlia finally gets Bitcoin. He used to encourage people to buy gold more than Bitcoin, but six-figure Bitcoin changes everything. Five-figure Bitcoin happened when BTC was still a plaything for tech folks, libertarians, and high-risk investors. It still seemed like an experiment. But six-figure Bitcoin has the support. board of BlackRock and literal nation states. 100K Bitcoin represents a phase shift. Bitcoin is vastly more investable for big money today. It's gone from embarrassing to own to own to own, and if you don't own some before it hits seven figures, you're a laggard. While Dahliao has been warning of a U.S. debt crisis for several years, he added China to his thesis earlier this year.

The explicit call to get out of debt instruments is also new, although heavily implied in prior statements. Still, some are sitting up and taking notice. Trader Andre LeBate wrote, Ray Dalio says ditch debt for Bitcoin and gold, when someone who built their empire on debt market starts stacking hard money that's more than a pivot. It's a signal that the system might be cracking. Finally, a couple stories in the stablecoin space, Tether has been legalized in Abu Dhabi, which means that the dominant stablecoin can now be legally offered by crypto exchanges and integrated into their regulated financial system. This includes international exchanges with local licensing, such as finance, as well as domestically focused exchanges like Rain and Bit Oasis.

More importantly, Tether can now claim to hold valid registration in a relatively major crypto hub. This could help if Western regulators decide to crack down on the Stablecoin, offering Tether at least one friendly jurisdiction as a fallback. Paulo Arduino, the CEO of Tether said in a press release, by bringing USDT to the forefront of Abu Dhabi's regulated virtual asset framework, we are not only validating the importance of Stablecoins as critical tools for modern finance, but also opening new doors for collaboration and growth across the Middle East. Finally, an interesting one, Circle has entered into a strategic partnership with Binanced,

to boost the prominence of USDC on the platform. USDC trading pairs will be added and USC will be included in promotions. The partnership was announced at Abu Dhabi Finance Week. A Binance spokesperson said, Binance believes stablecoins have important use cases in the broader financial ecosystem, from using a USD-peg stablecoin to hedge inflation in developing countries, to a lower cost and efficient remittance tool to a way to buy and sell other cryptocurrencies. Finance will also adopt USDC and their corporate treasury.

On Circle side of the deal, the firm will provide technology and liquidity. Additionally, Circle will assist finance to establish relationships in the global finance and commerce world. The stable coin firm also announced a new incorporated entity to be headquartered in Abu Dhabi, marking their ambition to expand into the Middle East. Peter Schroeder, Circle's head of marketing, wrote, We have officially incorporated an entity in Abu Dhabi, marking a milestone in our Middle East expansion, allowing us to provide USDC to a rapidly growing digital market. We talk about a lot of global jurisdictions, but the Middle East, in particularly the Gulf

states, is one that is increasingly important from a technology perspective. They really sit at the intersection both geographically and in a lot of other ways between the U.S. and China. They are an important part of the crypto story, but they are also an important part of the AI story. So very interesting to see the moves that are coming out of that region. For now that that is going to do it for this grab baggy episode of The Breakdown. Appreciate you listening, as always, and until next time, peace.