Speaker 1: Hey, welcome everybody. You are listening to the Mark Moss Show,
Speaker 1: where we are talking about bitcoin and cryptocurrencies and the
Speaker 1: decentralized revolution. I'm talking about the biggest opportunity we'll see
Speaker 1: in our lifetime, we'll see in multiple lifetimes. It is
Speaker 1: that big. Now I like to say that, Um well,
Speaker 1: I say over and over that real investors, professional investors,
Speaker 1: the ones that actually make money and don't lose money,
Speaker 1: they're always looking for something called an asymmetric return. That
Speaker 1: means they want to have more upside than downside. And
Speaker 1: so in order to get that asymmetric return, you have
Speaker 1: to have a symmetric information. You have to know information
Speaker 1: that the majority of people don't have. That's the only way.
Speaker 1: If everybody knows it, there's no there's no alpha, there,
Speaker 1: there's no edge. You don't have an edge, all right.
Speaker 1: You have to have an edge. You have to know
Speaker 1: something that most people don't know. And so that's why
Speaker 1: you need to tune into me each end every week.
Speaker 1: So pull out your phone, put a calendar reminder this
Speaker 1: time this channel. Do not miss this. It will be
Speaker 1: the most profitable hour of week. Also, if you have
Speaker 1: your phone in your hand, go ahead and pull out.
Speaker 1: Open up your Twitter or Instagram and find me. It's
Speaker 1: one Mark Moss on both the platform. Send me a message,
Speaker 1: tell me you heard me on the radio, and ask
Speaker 1: me a question. I'll make sure to answer it for
Speaker 1: you next week when we go live. Now we're talking
Speaker 1: about um bitcoins price. It broke. It's broke its previous
Speaker 1: all time high that was set back in April of
Speaker 1: this year, and there's really no resistance above head at
Speaker 1: this point. I mean, we're in this kind of no
Speaker 1: man's land, there's no resistance. We're in this true price
Speaker 1: discovery place at this point. And a lot of that
Speaker 1: was driven by, you know, some regulations that happened in China,
Speaker 1: but also in the United States. UM, in the United States,
Speaker 1: you know, we've continued to reach this level of entrenchment
Speaker 1: that I think is just impossible. There's just no way
Speaker 1: the government would ever um kill it at this point.
Speaker 1: And they can't kill it, but they could, you know,
Speaker 1: try to make it illegal. I don't think that would
Speaker 1: ever happen. And I think what over the last couple weeks,
Speaker 1: we heard the head of the SEC, Gary Gensler, and
Speaker 1: we heard the federal chair of Jrome pow both say
Speaker 1: that they will not make it illegal. They told us
Speaker 1: that verbatim um. And then we saw this week and
Speaker 1: this is the real big news were talking about this
Speaker 1: week is that this bitcoin e t F went into effect,
Speaker 1: and that was really big news, got got everybody excited. Now,
Speaker 1: I want to explain something about this e t F
Speaker 1: because there's there's there's probably a lot of miscommunication, a
Speaker 1: lot of misunderstanding going on with this et F, and
Speaker 1: I think it's very important for you to understand because
Speaker 1: it can be dangerous, all right, it can be dangerous. Now,
Speaker 1: the first thing I want you to understand is that
Speaker 1: there's two different types of ets I mean, there's there's
Speaker 1: more than that, but I want to break them down
Speaker 1: into kind of two main categories. And so you have
Speaker 1: a Future's e t F and you have a spot
Speaker 1: e t F. All right, let me explain to you
Speaker 1: what those two are. So a future's et F is
Speaker 1: basically a way to just bet, to gamble. You're basically
Speaker 1: betting on what the price of bitcoin will be in
Speaker 1: the future. I bet I gamble, you know, I bet
Speaker 1: you that it's going to be higher in the future,
Speaker 1: or I bet you it's going to be lower in
Speaker 1: the future. All right. That's the first way. The second
Speaker 1: way is a spot et f and that means you're
Speaker 1: actually buying the bitcoin, right, you actually own it, You
Speaker 1: have a at least you have a claim to it,
Speaker 1: all right, So it's a big difference. Now, the futures
Speaker 1: came out for a couple of reasons, and of course,
Speaker 1: like like everything, they kind of get distorted and changed
Speaker 1: over time. But in the beginning, you know, they were
Speaker 1: really used for commodities, which bitcoin is classified as a commodity,
Speaker 1: so that's why they have it um. But commodities typically
Speaker 1: would be like um, food, right, so grain, wheat, things
Speaker 1: like that. And if I was a farmer and I
Speaker 1: was growing wheat or whatever crop that may be. And
Speaker 1: let's say that I was afraid that I was going
Speaker 1: to have a bad year or that it was gonna
Speaker 1: be a good Year's we too much wheat and it's
Speaker 1: going to push the price down, or something's going to
Speaker 1: happen to the price. Right, So what I could do
Speaker 1: is I could sell a futures contract. I could get
Speaker 1: someone to agree to buy my wheat or corn or
Speaker 1: whatever it is at a fixed price in the future,
Speaker 1: and that way it takes some of the risk off.
Speaker 1: I'm guaranteed a price, and now they are the ones
Speaker 1: that have the risk. Now I could end up selling
Speaker 1: it short to not make as much money, but it's
Speaker 1: okay because I'm guaranteed to get that price. And that's
Speaker 1: kind of what's happening with the Bitcoin et F. It's
Speaker 1: a futures based contract. So I don't own the bitcoin,
Speaker 1: I don't have a claim to actually get any bitcoin.
Speaker 1: I'm just betting on where I think the price is
Speaker 1: going to be now. Um part. Another reason why the
Speaker 1: futures also work good for commodities is because typically commodities,
Speaker 1: when I'm talking about corn, you know, wheat grain, or
Speaker 1: I'm talking about oil, you know, commodities like that, they're
Speaker 1: they're very difficult, if not completely impossible, to take delivery of, right.
Speaker 1: I mean, imagine if a bunch of contracts, a bunch
Speaker 1: of tons of grain, you know, corn showed up at
Speaker 1: your house or oil, like, what are you gonna do
Speaker 1: with that? And so it was a way for a
Speaker 1: way for an investor to buy into that commodity, to
Speaker 1: put some money into that commodity, but without having to
Speaker 1: take delivery of it. Right. So that would be more
Speaker 1: of the spot side of things. So that's kind of
Speaker 1: what they were intended for. Of course, today they're just
Speaker 1: turned into this giant gambling casino that's going on over
Speaker 1: in Wall Street, and they're you know, betting on everything.
Speaker 1: I mean, today there's betting markets for everything. I think
Speaker 1: it probably probably a lot of people were surprised to
Speaker 1: see that there was like betting markets on the election,
Speaker 1: you know, for last year, and anything that can be
Speaker 1: bet on they're betting on. And they're betting on the
Speaker 1: price of bitcoin. Now. Um, the first thing I would
Speaker 1: say that I don't like about the futures um et
Speaker 1: F is that price is all driven by supply and demand,
Speaker 1: all right, So if there's more demand, more people want
Speaker 1: to buy, then there is supply than people that want
Speaker 1: to sell, and the price and actually goes up. And
Speaker 1: so as more and more people wanted to get into bitcoin,
Speaker 1: as corporations, as institutions, as hedge funds, as they es
Speaker 1: central banks, as they want to get access to bitcoin,
Speaker 1: they had to buy it. And when they bought it,
Speaker 1: it took supply off the market, which then push the
Speaker 1: price up higher. Right, And so the one one of
Speaker 1: the many revolutionary things about bitcoin is that it has
Speaker 1: a fixed supply cap right never be more than twenty
Speaker 1: one million gold. We talked about earlier if you caught
Speaker 1: the previous show, we talked about how gold has a
Speaker 1: stock to flow model. You have the stock the existing
Speaker 1: supply with the flow of the new and coming supply,
Speaker 1: and so there's an inflation rate. How much gold goes up. Now,
Speaker 1: if the price of gold went you know, right now
Speaker 1: it's on eight hundred bucks anounce, let's say it went
Speaker 1: to ten thousand announces, you'd have way more people go
Speaker 1: to mind gold, and you have way more gold coming
Speaker 1: into the into the world. With bitcoin, they can't increase that.
Speaker 1: You could you get the price of bitcoin to go
Speaker 1: up by ten x and you'd have ten x the
Speaker 1: amount of people going to mind bitcoin, but it wouldn't
Speaker 1: increase the supply of bitcoin at all. And so um,
Speaker 1: there's a supply demand thing and so um, since they
Speaker 1: can't create more than twenty one million, what they can
Speaker 1: do is with this future's e t F. Remember they're
Speaker 1: not actually buying bitcoin, they're buying they're just betting on it.
Speaker 1: So now money that typically if that hedge fund, that institution,
Speaker 1: that government wanted access to the price of bitcoin, they
Speaker 1: would have no choice book to buy it. Today, they
Speaker 1: instead of putting their million dollars of buying bitcoin, they
Speaker 1: just take that same million dollars and they bet on
Speaker 1: bitcoin instead. And so the million dollars is still getting
Speaker 1: access to the price of bitcoin, but it's not changing
Speaker 1: the demand and supply metrics. So I think that's a
Speaker 1: bad thing. Now we've seen this become very very bad,
Speaker 1: like in the gold industry for example. So in the
Speaker 1: gold industry, um, this is really big. And so you know,
Speaker 1: gold is a little bit hard to take advantage of
Speaker 1: two or I should say, take custody of right, So
Speaker 1: like if you have a lot of gold, I mean,
Speaker 1: what are you gonna do with it? Like you probably
Speaker 1: can't store it in your house, It's very expensive to
Speaker 1: ship and things like that, and so, um, a lot
Speaker 1: of people I buy the gold ETFs that don't actually
Speaker 1: own the gold. And studies have shown there's not a
Speaker 1: lot of transparency here. But some estimates show that there's
Speaker 1: approximately five hundred paper ounces of gold for everyone real
Speaker 1: ounce of gold. So what that means is there's at
Speaker 1: five people four nine of them think they own gold,
Speaker 1: but they don't really. Now, imagine if all of those
Speaker 1: four people that thought they own gold actually did if
Speaker 1: they took that money and actually bought physical gold based
Speaker 1: off supplying Man, what do you think would happen to
Speaker 1: the price of gold. It would shoot way higher, right,
Speaker 1: I mean five times higher. Um. But they've created this
Speaker 1: fake paper market, and I'm afraid that could happen to bitcoin,
Speaker 1: where you create this fake paper market which then creates
Speaker 1: an unlimited supply, and then it kind of suppresses the
Speaker 1: price down in a way because um, it's not you know,
Speaker 1: activating that supply and demand. So that's one thing that
Speaker 1: I don't like the futures without much rather see a
Speaker 1: spot et F. Of course, the the SEC won't approve
Speaker 1: a spot E t F right now. They say it's
Speaker 1: too dangerous. Um. In my opinion, what's dangerous is this
Speaker 1: fake futures betting. In my opinion, that's way more dangerous.
Speaker 1: If I bought bitcoin spot and it went down in value,
Speaker 1: at least I still own the bitcoin. If I just
Speaker 1: make a bet against it and I lose the bet,
Speaker 1: I lose everything. I own nothing, And so that seems
Speaker 1: to me more dangerous. But I want to get in
Speaker 1: a little bit more into how this spot or I'm right,
Speaker 1: how this future is actually works, because if you're considering
Speaker 1: buying it, there's actually some things that you need to know. Um,
Speaker 1: it is easy to get access to it, but there's
Speaker 1: some real dangers and it actually might be way more
Speaker 1: expensive and way more dangerous than you think. And so
Speaker 1: if you're thinking about buying this futures, you know it's
Speaker 1: easy to get from your brokerage account whatever it may be. UM,
Speaker 1: then you need to know this information. There's something known
Speaker 1: as the bleed. You need to know about the bleed.
Speaker 1: You need to know what the cash and carry is.
Speaker 1: You need to know something a negative role yield is called.
Speaker 1: You listen to the Mark Moa Show. We're talking about
Speaker 1: bitcoin futures. So the information that you need need you
Speaker 1: need to know about bitcoin so you can survive and
Speaker 1: thrive as this revolution plays out. I'll be right back.
Speaker 1: Hey everyone, welcome back. You are listening to the markma
Speaker 1: Show where I talk about bitcoin and cryptocurrencies and the
Speaker 1: decentralized revolution each and every week, bringing you the information
Speaker 1: you need. I mean, look, I say it over and
Speaker 1: over every each and every week. This is the biggest
Speaker 1: opportunity you'll ever have in your lifetime, and you need
Speaker 1: to have this information. Unfortunately, most people have wrong information.
Speaker 1: Wherever they're getting information from. I can pretty much tell
Speaker 1: you it's wrong. And if you have the wrong information,
Speaker 1: you're either not going to take advantage of this opportunity
Speaker 1: or you won't take advantage of it properly. And so
Speaker 1: you need to have that. So join me each and
Speaker 1: every week polot your phone intead of reminder. Also, by
Speaker 1: the way, tweet at me or hit me on Instagram.
Speaker 1: One Mark Moss, just the number one. Mark Moss asked
Speaker 1: me a question. I'll answer it next week. Now I'm
Speaker 1: talking about these futures, these bitcoin futures e t s
Speaker 1: that came out this week and the big, big, big news,
Speaker 1: of course, the price of bitcoin shot higher, new all
Speaker 1: time highs, and I was explaining, now there's two different
Speaker 1: types of bitcoin e T f s, and there's there's more,
Speaker 1: but I'm just breaking them in two buckets. And so
Speaker 1: basically you have the futures, which is basically you're not
Speaker 1: buying bitcoin, you're just betting on the future price, hence
Speaker 1: the name of futures. And then there's another one called spot,
Speaker 1: which is means you're actually buying it. You're actually buying
Speaker 1: the bitcoin. And uh, in an e t F, you
Speaker 1: would actually take delivery of it, but you would have
Speaker 1: a claim to it. And so what we got is
Speaker 1: the futures et F. We did not get the spot
Speaker 1: et F. And and there's some things with this, with
Speaker 1: this futures et F that you need to be aware of.
Speaker 1: Um overall, I would just say I don't recommend it
Speaker 1: for the average person. I don't think you should buy it.
Speaker 1: I would I would highly recommend that you stay away
Speaker 1: from it. For the average person. You should just buy
Speaker 1: bitcoin and you should store it yourself. It's so easy.
Speaker 1: One of the very, very, very many revolutionary things about
Speaker 1: bitcoin is it allows you to take custody of your
Speaker 1: own assets. Um Man, I can go down through so
Speaker 1: many tangents. I hate to go through the tangents, but
Speaker 1: it's hard for me not to explain this stuff to you.
Speaker 1: But think about this just real quick. Probably the oldest
Speaker 1: problem that man that humans have had, the oldest problem
Speaker 1: in the entire world of all the humanity, the biggest
Speaker 1: problem that man has had humans have had is how
Speaker 1: do you store your wealth? How do you store your
Speaker 1: property without it being taken. So, um, the early man,
Speaker 1: I'm afraid you're gonna come steal my chickens. So me
Speaker 1: and the neighbor get together and band together, and someone's
Speaker 1: gonna come take our chickens and our goats. So then
Speaker 1: we make a village to protect our property. And then
Speaker 1: we make a kingdom, and then we make a country.
Speaker 1: As a matter of fact, the role of the United
Speaker 1: States government is only to protect private property. That's it.
Speaker 1: But what's the revolution about bitcoin is that you know,
Speaker 1: let's say that I'm I'm holding my wealth, my value
Speaker 1: in gold, and I have a lot of gold. Well,
Speaker 1: that's gonna take up a lot of room. It's gonna
Speaker 1: be very heavy. I'm gonna have to spend a lot
Speaker 1: of money to build a safe and some walls, and
Speaker 1: I'm gonna have to hire some guards. So it's very expensive.
Speaker 1: And then I can't take it anywhere. It's very hard
Speaker 1: to move it. Um. And so those are types of problems, right.
Speaker 1: But if I can hold my wealth in bitcoin that
Speaker 1: can be cryptographically secured and it costs me zero dollars
Speaker 1: or effort to secure it, and it's portable, how does
Speaker 1: that change the world. I mean, it literally takes care
Speaker 1: of the oldest problem of humanity, and so that's a
Speaker 1: revolutionary thing, and so we should all take advantage of that.
Speaker 1: So don't buy bitcoin through an e t F, take
Speaker 1: custody of it, holding yourself. That's its revolutionary. But now
Speaker 1: back to the futures ETF. So there's a couple of
Speaker 1: things you need to be aware of, um And the
Speaker 1: first thing I want to talk about is something what's
Speaker 1: called the bleed. Alright, the bleed, they're gonna bleed you dry.
Speaker 1: The bleed is a negative contribution to your performance. Because
Speaker 1: this is kind of the way these things work. So
Speaker 1: most commodity futures et F s deal with a negative
Speaker 1: role yield. And so what does that mean? In this
Speaker 1: negative roll yield, so each month they're basically they're forced
Speaker 1: by a more expensive contract than the one that's about
Speaker 1: to expire. So we could look at a contract, so
Speaker 1: they have like an October contract, in November contract of
Speaker 1: December contract, etcetera. So let's say, for example, that the
Speaker 1: November contract is three fifteen dollars more expensive than October,
Speaker 1: and then December more expensive than November. So what happens
Speaker 1: is the futures et F passes that that expense what's
Speaker 1: called the bleed. They pass it directly to the holders.
Speaker 1: Right now, this type of positively sloping futures curve when
Speaker 1: it's going up in value, it's called contango. You may
Speaker 1: have heard that term before. It's contango. Now contango is
Speaker 1: not your friend, well not if you're a commodity futures
Speaker 1: investor et F investor. It is not your friend because
Speaker 1: basically what's happening is it's bleeding you dry. It's bleeding
Speaker 1: your profits. Each month you have to keep paying those
Speaker 1: fees as they roll that over that contango. Um. And
Speaker 1: so it's not your friend. Um. And so that's why
Speaker 1: it's important to understand which way you invest into bitcoin,
Speaker 1: and you understand what type of bleed you might experience
Speaker 1: in a bitcoin futures et F. Now, on a bitcoin
Speaker 1: spot et F, there is no bleed, right, there's no
Speaker 1: bleed because they're not rolling over a contract. You're just
Speaker 1: just buying and holding. Now a bit a spot et F,
Speaker 1: which we don't have yet, hopefully we'll get one soon.
Speaker 1: Well I would prefer we had no et F at all,
Speaker 1: but if we're gonna get one, on the prefers spot
Speaker 1: But They also still come with costs and fees, of course,
Speaker 1: you know the cost to run the fund and for
Speaker 1: their attorneys and you know all that other stuff. UM,
Speaker 1: But there's no negative roll yield. They're not trying to
Speaker 1: roll those fees onto every single month. So that's a
Speaker 1: really big thing. UM. One reason why I really am
Speaker 1: not a fan of this at all. UM. I think
Speaker 1: there's some controversy because the SEC is only approving a
Speaker 1: product with the bleed uh and and not one with
Speaker 1: physical storage, right. I don't know why they would do that.
Speaker 1: They say it's for your protection, of course, I just
Speaker 1: don't see how that's possible. But a couple of things
Speaker 1: to know about the e t F. I mean, it's
Speaker 1: it's it's a huge market. So first of all, I
Speaker 1: said earlier that um, the big win e t F
Speaker 1: was the UM second largest e t F launch in
Speaker 1: history really kind of the first biggest, but we'll call
Speaker 1: it the second biggest. UM. And And the e t
Speaker 1: F market is huge. The global et F market is
Speaker 1: currently about eight trillion dollars and it's growing at over
Speaker 1: twenty six percent per year, which is massive obviously, UM.
Speaker 1: And uh, you know this this new investment vehicle. It
Speaker 1: does make it super easy for people to buy it.
Speaker 1: So a lot of people, for example, they can just
Speaker 1: now buy it right from their brokerage account, right from
Speaker 1: their E Trade or Fidelity Charles Schwab account or something
Speaker 1: like that. So that is nice. It democratizes the investing,
Speaker 1: you know, in a big way. Um, And so I
Speaker 1: think this just slide right into this eight trillion dollar
Speaker 1: market cap and then grab a pretty large portion of Remember,
Speaker 1: as I said, it's growing by twenty six percent a
Speaker 1: year now. Year to date, bitcoins prices up over triple
Speaker 1: digits up. And um, you know, if the futures e
Speaker 1: t F provides a negative twelve precent roll yield, remember
Speaker 1: rolling those fees in every single month, and e t
Speaker 1: F would still have doubled in price, which is pretty
Speaker 1: amazing because there's no other ETLs out there. They are
Speaker 1: doubling in the brice And so I think there's going
Speaker 1: to be a lot of demand for this type of
Speaker 1: an ETF. I think we'll see investment managers tripping over
Speaker 1: themselves to finally have something where they can get access
Speaker 1: exposure to the price of the bitcoin without having to
Speaker 1: deal with it, you know, as a commodity, So I
Speaker 1: think it's gonna be really big, really big. Now there's
Speaker 1: something else that you need to call a no and
Speaker 1: as a term called cash and carry all right now,
Speaker 1: cash and carry UM is one of the oldest tricks
Speaker 1: in the book. It's the arbitrage and UM. I think
Speaker 1: it's important to understand what this is because there's also
Speaker 1: some risk that could be there as well. But if
Speaker 1: you understand how to play this right, it could actually
Speaker 1: be a pretty big benefit for you. So I want
Speaker 1: to talk about the cash and carry and then I
Speaker 1: also want to talk about UM. One of the best
Speaker 1: known investors in the world today probably is a billionaire
Speaker 1: venture capitalists invested in all top technology. He says that
Speaker 1: he is under invested UM and he has some very
Speaker 1: important things to say. I think that will provide a
Speaker 1: lot of perspectives. I want to talk about that when
Speaker 1: we get back as well, UM, and we're gonna talk
Speaker 1: about some countries that are continuing to grow into this
Speaker 1: Bitcoin as well. Again, is the information that you need
Speaker 1: to participate to to take advantage of. I should say
Speaker 1: of the bitcoin, uh decentralized revolution, the cryptocurrency revolution that's
Speaker 1: happening right now. I have some big news. I want
Speaker 1: to bring it to you. Um, you're listening to the
Speaker 1: Mark Mo Show. We'll be right back, all right, Welcome back.
Speaker 1: You are listening to the Mark Mo Show where I
Speaker 1: bring to you the latest in information on bitcoin and
Speaker 1: cryptocurrencies and this decentralized revolution that's happening or right before
Speaker 1: our very eyes. You know, it's interesting when you're living
Speaker 1: through history, you probably don't see it, you don't recognize it.
Speaker 1: But I can tell you for sure that history books
Speaker 1: will be written about this very point in time. We're
Speaker 1: living through one of the most volatile times, um, in
Speaker 1: modern history. And you know, I think most people can
Speaker 1: realize how much, how much is how much is changing
Speaker 1: in this world. But what a lot of people don't
Speaker 1: probably realize is that there's this huge opportunity sitting in
Speaker 1: front of us. And so that's what I'm trying to
Speaker 1: bring to you each and every week. Now, before the break,
Speaker 1: we were talking about this Bitcoin e t F that
Speaker 1: went through this week. It was the biggest news that
Speaker 1: kind of rocked the world. It shot the price of
Speaker 1: bitcoin and most of the cryptocurrencies up higher this week. UM,
Speaker 1: And I think you know, for a couple of reasons.
Speaker 1: But I think one of the big, big, big reason
Speaker 1: is obviously it it brought a lot more access to bitcoin,
Speaker 1: so a lot of people are now able to buy
Speaker 1: it directly from their stock trading and account, which is big.
Speaker 1: But I think more than that, it was also just
Speaker 1: the legitimacy factor. I think the legitimacy factor of it
Speaker 1: really helped because of this Bitcoin ETF and meaning that
Speaker 1: you know, one of the biggest complaints or I should
Speaker 1: say objections that people still throw out over bitcoin is
Speaker 1: that the governments are going to make it illegal. People
Speaker 1: still say that all the time, and so they've they've
Speaker 1: told us they're not going to make it illegal. And
Speaker 1: now I think through this UM E t F, I
Speaker 1: mean it's kind of like the final kind of final
Speaker 1: nail that just says like we're not gonna do it,
Speaker 1: like we're not gonna make it illegal. So I think
Speaker 1: it brought a lot of legitimacy to it. Now I
Speaker 1: was talking about UM the two different type, two main
Speaker 1: types of bitcoin E t F. So there's the futures
Speaker 1: based where betting on the future price whether the price
Speaker 1: is gonna be higher or lower UM, and then you
Speaker 1: have the spot future where you're actually buying buy it directly. Now,
Speaker 1: this is not a spot um E t F. This
Speaker 1: is only a future space et FUM, so that's important
Speaker 1: to understand UM. And then I went through. I was
Speaker 1: talking about the bleed and a negative rule yield and
Speaker 1: so that's the fees. Basically every month they're gonna keep
Speaker 1: passing on too. So I don't really recommend this futures
Speaker 1: et F for most people. I think you're just way
Speaker 1: better off just buying bitcoin directly. But I was going
Speaker 1: to talk about something called the cash and carry. So
Speaker 1: cansh and carry is is pretty interesting and in this
Speaker 1: type of environment it kind of works out um. And
Speaker 1: it's it's an arbitrage trade. So that means that you
Speaker 1: can buy low, sell high, and make the spread. And
Speaker 1: so basically what you do is you sell the future
Speaker 1: of the commodity and then you buy the spot if
Speaker 1: there's a risk free profit that can be made. And
Speaker 1: so what do I mean by that? So let's say
Speaker 1: that bitcoin right now is at sixty three thousand dollars
Speaker 1: or six Let's let's just say that hypothetically it's at
Speaker 1: let's use easy numbers, So let's say it's at sixty
Speaker 1: five dollars. Um, I can buy it at spot, but
Speaker 1: I could I could sell a futures for December at
Speaker 1: sixty five thousand, or let's called sixty six thousand. So
Speaker 1: that means I could sell a contract someone would be
Speaker 1: guaranteed to buy bitcoming from me at sixty six thousand
Speaker 1: in December, but I could buy it for sixty five
Speaker 1: thousand today. Well, that means I have a guaranteed one
Speaker 1: thousand dollar profit, a risk free profit, because someone's already
Speaker 1: entered the contract to buy it from me at that price. Um,
Speaker 1: and so that's a cash and carry trade. What I
Speaker 1: would do is I would sell the futures at sixty six,
Speaker 1: I would buy it at sixty five, and boom, I
Speaker 1: would instantly book a thousand dollars profit. Now, a thousand
Speaker 1: dollars profit may not sound like that much, but imagine
Speaker 1: if you're a hedge fund with with with billions of
Speaker 1: dollars going into this, and it's a risk free trade,
Speaker 1: it's a pretty big deal. Now, the risk free trade
Speaker 1: is a big piece of that. I'm not going to
Speaker 1: spend a lot of time talking about that today, but um,
Speaker 1: one thing you have to think about when you're investing
Speaker 1: is you have to think about your risk adjusted return
Speaker 1: and so UM, while you may be able to make
Speaker 1: a bigger return somewhere else, you also have to take
Speaker 1: into a consideration the risk. So a risk free trade
Speaker 1: is pretty amazing. And so I think with the demand
Speaker 1: for bitcoin futures blasting off right now and the amount
Speaker 1: of e t F flows. Remember I talked about as
Speaker 1: an eight trillion dollar market, it's growing by twenty six
Speaker 1: percent a year. With that amount of flows coming into
Speaker 1: e t F s, then I think the future prices
Speaker 1: will continue to go up and up and up, and
Speaker 1: so I would expect more of these arbitragers to come
Speaker 1: into the market and try to bank on that cash
Speaker 1: and carry trade. As they do that, then it should
Speaker 1: continue to push the price of bitcoin up, which means
Speaker 1: will continue to see this and it kind of becomes
Speaker 1: this like self fulfilling prophecy. It's kind of like the
Speaker 1: price of bitcoin will just continue to skyrocket as this
Speaker 1: chain of events continues on um, you know, real quick.
Speaker 1: Just to jump back into the risk analysis, what's interesting
Speaker 1: is that I started buying bitcoin in two thousand fifteen UM.
Speaker 1: At the time, it was you know, a couple hundred bucks.
Speaker 1: I think three d bucks four hundred bucks at the time.
Speaker 1: But at the time, you know, up until you know,
Speaker 1: so from those five years, UM big one was was.
Speaker 1: I mean, it still is super volatile. I went up,
Speaker 1: you know, and went up, and it went down and
Speaker 1: went up, dropped up, dropped and I saw this happening
Speaker 1: a bunch and so I wasn't super comfortable buying into it,
Speaker 1: but I finally did, and it was it was still
Speaker 1: very risky, right like, who knows what it was going
Speaker 1: to be. Who knows there was all these other crypto
Speaker 1: currencies coming on board. UM. You know, I knew it
Speaker 1: at some point the government was gonna want to fight
Speaker 1: against it UM and so there was a lot of
Speaker 1: risk associated with it UM. And so at the time,
Speaker 1: because it was so risky, I only allocated, you know,
Speaker 1: a little bit to it UM. And over time, by
Speaker 1: seen it was way more legitimate. UM, it was much bigger.
Speaker 1: It had survived multiple crashes. UM. Now we had the CME,
Speaker 1: the commodities you know, future exchange regulating it, so it
Speaker 1: was way less risky in it was. So I put
Speaker 1: more money into it UM. But today, I mean, if
Speaker 1: I would have just taken the money I put in
Speaker 1: this year alone, and put that in back in Uh,
Speaker 1: you probably never would have heard of me. I would
Speaker 1: have been gone long gone by now, but I didn't.
Speaker 1: And the reason why it's because there was so much
Speaker 1: risk back then. Now there's now, you know, there's less risk.
Speaker 1: I'm putting in more money, I would say today, especially
Speaker 1: now with this EF, I would say we're sitting on
Speaker 1: pretty much I mean, the lowest amount of risk that
Speaker 1: you could imagine with still an amazing return. So going
Speaker 1: back to you know, an investor looking for a risk
Speaker 1: adjusted return, and I've been I've been a full time
Speaker 1: investor for over over two decades now, I've never seen
Speaker 1: in my entire life, in my entire career, I've never
Speaker 1: seen this good I'm going a risk adjusted return ever.
Speaker 1: And so that's that's pretty amazing to think about. As
Speaker 1: we're talking about that risk perspective. UM. Some other things
Speaker 1: that are cool. I think about this et F is
Speaker 1: that when you look at technology, UM, the way that
Speaker 1: a new technology reaches adoption or UM you know, breaks
Speaker 1: out into the marketplace is always predictable. All right. So
Speaker 1: there's there's something called UM. There's something called the diffusion
Speaker 1: of innovation. All right, So the diffusion of innovation basically,
Speaker 1: it basically kind of charts how that diffusion, how it
Speaker 1: gets down, how that that adoption happens, all right, and
Speaker 1: so um, you've probably all seen this like Bell curve
Speaker 1: chart where you have, like, um, the innovators in the beginning,
Speaker 1: and then you have like the early adopters, and then
Speaker 1: you have the early majority, and then the late majority
Speaker 1: and then the laggers. So you've probably seen it like
Speaker 1: this upside down. It's like a Bell curve chart. And
Speaker 1: if you've if you've ever looked at that, you have
Speaker 1: the innovators, the techies, then the early adopters which are
Speaker 1: the visionaries, and then there's a gap there. And there's
Speaker 1: a gap there. It's called the chasm. And what's interesting
Speaker 1: about that chasm is that there was a book written
Speaker 1: about it by Geoffrey moore Is. He wrote a book
Speaker 1: called Crossing the Chasm, and he explains that the reason
Speaker 1: why there's a chasm between the early adopters and the
Speaker 1: early majority, um is because of that chasm, and it's
Speaker 1: the hardest gap to close, and it's right around eighteen
Speaker 1: and a half percent adoption. So the innovators that they're
Speaker 1: like five the early adopters like another ten percent adoption,
Speaker 1: and then there's that chasm. And in order to cross
Speaker 1: the chasm, to go from the visionaries the true believers,
Speaker 1: to go from them to the early majority, there has
Speaker 1: to be a mental shift, right, something has to change
Speaker 1: for that to happen and to bring those in. I
Speaker 1: want to explain to you really what that is, Like
Speaker 1: I said, what does that mental shift that has to happen?
Speaker 1: And then more importantly, what happens once we crossed the chasm?
Speaker 1: And then even more importantly, where are we in that
Speaker 1: right now? Where are we at in that chasm? And
Speaker 1: what does this Bitcoin e t F have to do
Speaker 1: with it? Um, There's also another piece of another model
Speaker 1: that we would use, and it's called an S curve,
Speaker 1: And an S curve is also used to measure, you know,
Speaker 1: this diffusion of innovation or this this adoption cycle. And
Speaker 1: we can take this S curve and we can overlay
Speaker 1: it on top of the Bell curve diffusion chart. And
Speaker 1: I think you might be pretty surprised with the answer. Now,
Speaker 1: if you're following me on Twitter, UM, I've put some
Speaker 1: of this onto my Twitter a few days ago, and
Speaker 1: you can actually see the charts and see how I've
Speaker 1: overlaid them. I'll explain it to you here on the radio.
Speaker 1: But if you're not following me on Twitter already you should.
Speaker 1: I'm just number one Mark Moss again, number one Mark
Speaker 1: Moss on Twitter and Instagram. Send me ms said, shout
Speaker 1: at me. Ask me a question. I'll make sure to
Speaker 1: answer it live um next week. And of course you're
Speaker 1: listening to the Mark mos Show. We're talking about bitcoin,
Speaker 1: cryptocurrencies and the decentralized Revolution. And I'll be right back.
Speaker 1: All right, welcome back. You're listening to them show. We're
Speaker 1: talking about bitcoin, We're talking about cryptocurrencies and the decentralized revolution.
Speaker 1: We have been talking about the price breaking new all
Speaker 1: time highs. We've been talking about the catalyst that we're
Speaker 1: involved in that from China banning it, which was pushing
Speaker 1: more people into it. We talked about how the government
Speaker 1: of the United States says they won't ban it, and
Speaker 1: now how Wall Street has adopted it with this e
Speaker 1: t F, which I think is really big news. I mean,
Speaker 1: I was explained to the differences of the two different
Speaker 1: types of e t F, the dangers, the really the
Speaker 1: risks that are associated with some of them that you
Speaker 1: need to be careful of. How I think you should
Speaker 1: be buying it, which spoiler alert is don't buy it
Speaker 1: through then ETF, just buy it directly. UM. And then
Speaker 1: I was going into talking about this adoption cycle and
Speaker 1: how there's these kind of dependable models that new technology
Speaker 1: goes through, and I was explaining how in this book
Speaker 1: by Geoffrey Moore, UM, there's a book titled The Crossing
Speaker 1: the Chasm, and it talks about how any new technology
Speaker 1: kind of goes to this this bell curve where it's innovators,
Speaker 1: early adopters UM to early ority, late majority, and laggers
Speaker 1: and this, UH, this in between the early adopters, the
Speaker 1: visionaries and the early majority is this thing called the chasm.
Speaker 1: And the chasm is about at about an eighteen percent
Speaker 1: adoption rate, so about eighteen percent of the population would
Speaker 1: be using at that point. And it's the hardest part
Speaker 1: to get over. And the reason why is because, UM,
Speaker 1: the mind shift has to happen because the visionaries are
Speaker 1: like the true believers. But then it's hard to get
Speaker 1: the early majority in and so we really have to
Speaker 1: change the entire way the market looks at it and UM,
Speaker 1: I think, well, we we we have that, and then
Speaker 1: we have this S curve. And S curve is another
Speaker 1: model where we can also look at adoption. And so
Speaker 1: when we look at S curve, basically the way an
Speaker 1: ES curve works is imagine a S lane on its side,
Speaker 1: so you kind of have the S at the bottom,
Speaker 1: and then it makes a left turn going up vertical,
Speaker 1: and then it kind of makes a right turn or
Speaker 1: curve I should say, a right curve, and then goes
Speaker 1: kind of horizontal again. And and so the S curve
Speaker 1: the way it works is UM. However long it takes
Speaker 1: for a new technology to get to ten percent adoption
Speaker 1: is typically the time that it would take to go
Speaker 1: from ten to adoption. So for example, UM, well, for
Speaker 1: for for for this purpose, UM, it took about ten
Speaker 1: years for Bitcoin to reach about ten percent of the adoption.
Speaker 1: So then that means that then UM, it should take
Speaker 1: another ten years to get to So that means that
Speaker 1: it should happen by about which is about eight years
Speaker 1: from now. Now, if we take that S curve and
Speaker 1: then we lay that over the UM the upside down
Speaker 1: bell curve, this diffusion of innovation UM, and remember the
Speaker 1: chasm sits right around that UM line. We can if
Speaker 1: we lay the S curve over this bell curve, we
Speaker 1: can see that the current amount of bitcoin adoption today
Speaker 1: sits right at this chasm. And remember to cross the
Speaker 1: chasm is when things really take off, they blow up.
Speaker 1: And the reason why it's because we have to change
Speaker 1: the perception UM to get across that chasm. And I
Speaker 1: think that that is what is happening right now. Remember UM.
Speaker 1: One of the biggest objections people have is that it
Speaker 1: can be made illegal, and UM we've seen in the
Speaker 1: last week or two both ahead of the SEC, Gary
Speaker 1: Gensler and the head of the Jeroan Powell, both said
Speaker 1: they won't make bitcoin illegal. And then we got the
Speaker 1: Bitcoin e t F. And I think even though it's
Speaker 1: not the best vehicle to buy bitcoin UM or own bitcoin,
Speaker 1: well you don't even own it, right, all you're doing
Speaker 1: is betting on the price. What it does is it
Speaker 1: changes the perception, right. It changes the perspective where people
Speaker 1: who think that you know, um, Wall Streets legitimate, and
Speaker 1: now there's a legitimate Wall Street fund for a bitcoin.
Speaker 1: It changes the perception. And that's exactly what has to
Speaker 1: happen to go from the visionary to the early majority.
Speaker 1: And remember at the S curve is when things really
Speaker 1: start taking off, right, So ten years to get to
Speaker 1: tempercent adoption and then another ten years to go from
Speaker 1: ten percent to adoptions. That's like a parabolic run. And
Speaker 1: I think that's where we're going. I think that's what
Speaker 1: this et F represents UM, and I think we're going
Speaker 1: to continue to see fireworks. Now. Of course there's bigger catalysts,
Speaker 1: and we talked about them all the time. We saw,
Speaker 1: you know, not just what's going on in the United States,
Speaker 1: but of course we're seeing you know, El Salvador, a
Speaker 1: nation now has started adopting it UM and and that's
Speaker 1: only been continuing to grow. UM. They passed a law
Speaker 1: September seven, so I don't know, six weeks ago approximately,
Speaker 1: UM to make a bitcoin legal tender in El Salvador.
Speaker 1: And then what they did is they created their own wallet,
Speaker 1: and anybody in El Salvador that downloaded the wallet was
Speaker 1: given thirty dollars of a free bitcoin just for downloading
Speaker 1: the wallet and using it, which was pretty cool. Since
Speaker 1: that time, anybody that got that free bitcoin and has
Speaker 1: sat on it has seen their wealth grow by about
Speaker 1: thirty five percent, so that's pretty cool. Um. And we've
Speaker 1: also seen massive bitcoin adoption happening. Um More people I
Speaker 1: think are using bitcoin wallets than are using bank accounts
Speaker 1: in El Salvador now, which is pretty amazing. Um. Today
Speaker 1: we saw an airline Valarus Airline said now you can
Speaker 1: start paying for your airline tickets in bitcoin, and so
Speaker 1: we're just I mean, things are just really really really
Speaker 1: starting to escalate super super fast, which is pretty interesting
Speaker 1: as we continue to see this this uh, this progress.
Speaker 1: I was also talking about wanting to kind of jump
Speaker 1: in and talk about one of the maybe most well known,
Speaker 1: you know, billionaire venture capitalist, Peter Thiel. He's famous for
Speaker 1: being involved in PayPal and running some of the biggest
Speaker 1: incubators in Silicon Valley, and he's also kind of somewhat
Speaker 1: known and uh known in the bitcoin world um as
Speaker 1: as being an early bitcoin investor, which is not typical
Speaker 1: for these venture capitalists. UM, but he he is one
Speaker 1: of them, um that that has come in early. And
Speaker 1: he was at a it was at a meeting this
Speaker 1: last week and he said some pretty interesting things and
Speaker 1: one of the things that he said was that, well
Speaker 1: he was he was kind of drawing this comparison. He's
Speaker 1: a tech billionaire, right, That's how he new his money,
Speaker 1: being at the front end of these things. And he
Speaker 1: basically praised bitcoin and cryptocurrencies and then he slammed the
Speaker 1: central banks at the same time. This is on a
Speaker 1: Wednesday of this week. And um, he said, quote, you're
Speaker 1: supposed to just buy bitcoin. End quote what he said,
Speaker 1: you're supposed to buy it. There's a term hoddler h
Speaker 1: o d l hold on for dear life, and you
Speaker 1: just buy and just hoddle it as it buy and
Speaker 1: hoddle it. Um. And then he went on he said, quote,
Speaker 1: I feel like I've been under invested in it. End quote. Now,
Speaker 1: anytime you buy an investment and it goes up in value,
Speaker 1: especially a big value like this, you're always going to
Speaker 1: feel like you're under invested. Dang it, I should have
Speaker 1: bought more. It's going to be the typical response. Um.
Speaker 1: So it's funny that he said that, but that's a
Speaker 1: typical response. But also, um, if you bought something to
Speaker 1: hope it goes up in value and it goes down
Speaker 1: in value, then you also say the second thing, the opposite,
Speaker 1: which is, dang it, why did I put so much money?
Speaker 1: In UM. So it's it's kind of funny to see
Speaker 1: someone as as as experienced as he is kind of
Speaker 1: still have that same kind of fomo approach or whatever
Speaker 1: that most of us would have, where he's like, dang,
Speaker 1: and I feel like I'm under invested. Um. But of
Speaker 1: course some of the real bitcoin believers, like myself says
Speaker 1: that if you still have any cash to put into bitcoin,
Speaker 1: then you're probably underinvested, and so he's probably there. But
Speaker 1: I really love what he said. After that, he went
Speaker 1: on to say something, So, what have I been repeating
Speaker 1: over and over every single show and uh, this whole episode.
Speaker 1: I keep talking about having uh an asymmetric opportunity, right,
Speaker 1: more upside than downside. And I talk about UM having
Speaker 1: that asymmetric opportunity, and the way to take advantage of
Speaker 1: it is to have asymmetric information. Right, I say it
Speaker 1: over and over, say it all the time. Well, he
Speaker 1: said um Fiel said his only hesitation about investing was
Speaker 1: that he thought, quote the secret was already known by
Speaker 1: everybody end quote mm hmm. His hesitation, so he said
Speaker 1: he was under invested. Why was he under invested? Well,
Speaker 1: his hesitation was he thought the secret was already known
Speaker 1: by everybody. He thought he didn't have an edge, He
Speaker 1: thought he didn't have asymmetric information. Then he goes on
Speaker 1: to say he concluded that quote I think the answers
Speaker 1: are still go along and quote maybe it's still is
Speaker 1: enough of a secret. Wow, one of the biggest and
Speaker 1: Welsh most well known venture capitalist tech investors UM didn't
Speaker 1: buy enough. He says he's regrets he's underinvested because he
Speaker 1: thought it was too well known. But now he realized,
Speaker 1: quote maybe it's still enough of a secret, and it
Speaker 1: certainly is. Go out to them all, go out to
Speaker 1: a park, talk to a hundred people. Asked him how
Speaker 1: many people UM own bitcoin? And you're gonna find out
Speaker 1: hardly anybody knows about it. Uh. The information they have
Speaker 1: is wrong and not equipped to take advantage of this opportunity.
Speaker 1: But that's why you're listening to me, That's why you're
Speaker 1: join with me each and every week. UM, I'm bringing
Speaker 1: you the asymmetric information that you need to take advantage
Speaker 1: of this asymmetric opportunity. So pull up your phone, put
Speaker 1: a reminder to come back each and every week at
Speaker 1: this time this channel, and of course send me a
Speaker 1: message on Twitter. I'm at one Mark Moss again on
Speaker 1: Twitter at one Mark Moss and Instagram as well. Send
Speaker 1: me a message, ask me a question, and I'll make
Speaker 1: sure to answer it on the radio next week I'll
Speaker 1: Mark Moss. Thanks for listening.