1 00:00:00,160 --> 00:00:03,279 Speaker 1: All right, welcome back to another episode of the Markmas 2 00:00:03,400 --> 00:00:07,160 Speaker 1: Show where we are talking about bitcoin, We're talking about cryptocurrencies, 3 00:00:07,160 --> 00:00:09,680 Speaker 1: we are talking about the decentralized revolution, each and every 4 00:00:09,720 --> 00:00:13,280 Speaker 1: week bringing you the latest news, the education and some 5 00:00:13,320 --> 00:00:15,800 Speaker 1: of the biggest, brightest guests in the space, so you 6 00:00:15,840 --> 00:00:19,079 Speaker 1: can have all the information that you need in order 7 00:00:19,120 --> 00:00:23,640 Speaker 1: to be prepared. Now, Uh, things happen fast. Sometimes things 8 00:00:23,680 --> 00:00:26,759 Speaker 1: happen fast, sometimes things happens slow. But uh, right now, 9 00:00:26,880 --> 00:00:28,960 Speaker 1: we have seen a lot of things, and unfortunately the 10 00:00:29,000 --> 00:00:31,800 Speaker 1: price of bitcoin is a little bit down. Um, it's 11 00:00:31,840 --> 00:00:33,760 Speaker 1: off its peak. It was as high as sixty nine 12 00:00:33,760 --> 00:00:36,400 Speaker 1: thou dollars and sitting and sitting now trying to kind 13 00:00:36,400 --> 00:00:39,879 Speaker 1: of recoil and grab some energy in the fifty thousand 14 00:00:40,080 --> 00:00:43,040 Speaker 1: ish range as we speak right now. But don't fret, 15 00:00:43,080 --> 00:00:45,239 Speaker 1: don't fret, just a little break. I mean, we were 16 00:00:45,280 --> 00:00:48,360 Speaker 1: literally a year ago at thirty thousand, and today we're 17 00:00:48,360 --> 00:00:51,720 Speaker 1: consolidating around fifty thousand, which seems like a pretty good 18 00:00:51,720 --> 00:00:53,760 Speaker 1: increase to me. To go from thirties thousand to fifty 19 00:00:53,800 --> 00:00:56,480 Speaker 1: thousand in a year, I'll take it. It's better than 20 00:00:56,520 --> 00:00:58,840 Speaker 1: any other markets have done. Now did go up aside 21 00:00:58,880 --> 00:01:01,640 Speaker 1: sixty nine thousand, and it's down own. But you're focusing 22 00:01:01,680 --> 00:01:03,160 Speaker 1: on the wrong thing. Are you a are you a 23 00:01:03,200 --> 00:01:05,720 Speaker 1: glass half full or a glass half empty kind of person? Right? 24 00:01:05,959 --> 00:01:09,080 Speaker 1: So think about that. Um. Now, if you need any 25 00:01:09,200 --> 00:01:11,920 Speaker 1: bid hope, let me just give you a piece of 26 00:01:11,959 --> 00:01:13,440 Speaker 1: news that broke this week and then we're going to 27 00:01:13,560 --> 00:01:15,920 Speaker 1: dive into something that I'm gonna have one of my 28 00:01:15,920 --> 00:01:20,760 Speaker 1: good friends, Nick bodia On, he's a USC adjunct professor, 29 00:01:21,400 --> 00:01:26,440 Speaker 1: and he wrote something that says, the price is truth, 30 00:01:26,880 --> 00:01:30,160 Speaker 1: the price is always the truth. Now, well, if you 31 00:01:30,200 --> 00:01:32,120 Speaker 1: don't like the price where it's at today, maybe you 32 00:01:32,120 --> 00:01:34,080 Speaker 1: don't like the truth, but let's talk about where the 33 00:01:34,120 --> 00:01:38,800 Speaker 1: price could potentially go. So, um, If you, you know, 34 00:01:38,880 --> 00:01:41,520 Speaker 1: pay attention to money at all, chances are you probably 35 00:01:41,520 --> 00:01:43,960 Speaker 1: heard of Goldman Sacks, Golden raise your hand. If you 36 00:01:44,000 --> 00:01:45,520 Speaker 1: heard of Golden sac well, I can't see you raising 37 00:01:45,520 --> 00:01:48,800 Speaker 1: your hands though, never mind, but Goldman Sacks. Unless you've 38 00:01:48,800 --> 00:01:50,800 Speaker 1: been living under rock, you know who Goldman Sacks are. 39 00:01:50,800 --> 00:01:54,880 Speaker 1: They are the UH financial affirment in the United States 40 00:01:54,880 --> 00:01:57,600 Speaker 1: and really in the world. You've either worked at Goldman 41 00:01:57,600 --> 00:01:59,000 Speaker 1: Sachs and then the government and the government and the 42 00:01:59,000 --> 00:02:00,800 Speaker 1: Golden Sacks in your base of the same and uh, 43 00:02:01,040 --> 00:02:02,520 Speaker 1: you basically kind of run the world at this point. 44 00:02:02,600 --> 00:02:05,280 Speaker 1: Let's just kind of saying like that. Goldman Sacks came 45 00:02:05,320 --> 00:02:07,920 Speaker 1: out with an article this week just the other day 46 00:02:08,880 --> 00:02:13,760 Speaker 1: that said, despite bitcoin's ebbs and flows, they believe bitcoin 47 00:02:13,800 --> 00:02:19,359 Speaker 1: could reach a hundred thousand dollars Wow. As it's as 48 00:02:19,360 --> 00:02:22,040 Speaker 1: they say, it's steadily pushing out gold's place in the 49 00:02:22,240 --> 00:02:27,400 Speaker 1: store of value market. Mm hmm. They said. After topping 50 00:02:27,440 --> 00:02:32,000 Speaker 1: out nearly at seventy November, then bitcoin decided to decline. 51 00:02:32,040 --> 00:02:36,760 Speaker 1: As we talked about that, but bitcoin's Goldman Sacks puts 52 00:02:36,800 --> 00:02:41,080 Speaker 1: bitcoins float adjusted market capitalization at just below seven hundred 53 00:02:41,120 --> 00:02:45,520 Speaker 1: billion store of value market assets that gain or stay 54 00:02:45,520 --> 00:02:48,480 Speaker 1: stable over time. Gold is presently at two point six trillions. 55 00:02:48,520 --> 00:02:51,480 Speaker 1: So what they're saying is that, um, the gold market 56 00:02:51,600 --> 00:02:54,919 Speaker 1: is really it's it's a lot more than that. Um. 57 00:02:54,919 --> 00:02:57,200 Speaker 1: But but they're talking about the percentage of gold that 58 00:02:57,520 --> 00:03:01,160 Speaker 1: people use. And typically people would move to gold to 59 00:03:01,600 --> 00:03:05,280 Speaker 1: what I call a chaos hedge. So whenever there's chaos 60 00:03:05,320 --> 00:03:08,600 Speaker 1: in the markets, whether there's massive inflation, deflation, or whatever 61 00:03:08,639 --> 00:03:11,280 Speaker 1: type of chaos is going on, then people would turn 62 00:03:11,360 --> 00:03:16,480 Speaker 1: to gold. Historically. What they're saying is Goldman Sachs, not me, 63 00:03:17,120 --> 00:03:20,799 Speaker 1: although I agree what Goldman Sachs is saying that they 64 00:03:20,800 --> 00:03:25,120 Speaker 1: are seeing bitcoin taking up that store of value market 65 00:03:25,200 --> 00:03:28,960 Speaker 1: that retail would typically go to UM and now it's 66 00:03:29,120 --> 00:03:33,120 Speaker 1: going into bitcoin. UM. They say that it's about you know, 67 00:03:33,280 --> 00:03:35,920 Speaker 1: the percentage of people, the percents of of the market 68 00:03:35,960 --> 00:03:37,800 Speaker 1: gap that people would go to for the store value 69 00:03:37,800 --> 00:03:41,440 Speaker 1: markets about two point six trillion and uh. They said 70 00:03:41,480 --> 00:03:43,560 Speaker 1: that in the next five years bitcoin making up as 71 00:03:43,640 --> 00:03:47,360 Speaker 1: much as fifty percent of the entire store of value market. 72 00:03:47,760 --> 00:03:51,360 Speaker 1: So right now, UM, the amount of bitcoin or the 73 00:03:51,360 --> 00:03:53,280 Speaker 1: bitcoin is being used as a store value. What does 74 00:03:53,280 --> 00:03:55,960 Speaker 1: that mean store of value? Well, when I earned my money, 75 00:03:57,160 --> 00:04:00,440 Speaker 1: I'm storing my energy to be used at another point 76 00:04:00,480 --> 00:04:03,600 Speaker 1: in time. So, for example, to break this down to 77 00:04:03,640 --> 00:04:06,160 Speaker 1: kind of the first principles level, if I was saying 78 00:04:06,200 --> 00:04:10,960 Speaker 1: digging a hole and I'm expending so I I consume calories, 79 00:04:11,000 --> 00:04:13,600 Speaker 1: I eat food, that's calories. Those calories are energy in 80 00:04:13,640 --> 00:04:16,400 Speaker 1: my body. I expend those calories that energy by digging 81 00:04:16,400 --> 00:04:17,720 Speaker 1: a hole. Let's say I have to dig a hole 82 00:04:17,760 --> 00:04:19,839 Speaker 1: for four hours in a day to earn enough to 83 00:04:19,920 --> 00:04:21,800 Speaker 1: give me my food and shelter that I need to survive. 84 00:04:22,640 --> 00:04:24,200 Speaker 1: But let's say that then I decided to work an 85 00:04:24,240 --> 00:04:27,159 Speaker 1: extra four hours. Well, i've worked an extra four hours, 86 00:04:27,160 --> 00:04:28,840 Speaker 1: expend an extra four hours of energy. Now I need 87 00:04:28,839 --> 00:04:30,920 Speaker 1: to be able to store that energy in a way 88 00:04:30,920 --> 00:04:32,359 Speaker 1: that I could use at a later in time. So 89 00:04:32,360 --> 00:04:34,040 Speaker 1: now I could use that energy for tomorrow and I 90 00:04:34,040 --> 00:04:37,320 Speaker 1: don't have to work all right, So I'm storing my wealth, 91 00:04:37,320 --> 00:04:39,960 Speaker 1: storing my energy, storing my value to be used at 92 00:04:39,960 --> 00:04:42,960 Speaker 1: a later in time. Now, typically people do that with money. 93 00:04:43,080 --> 00:04:45,480 Speaker 1: So you earn money, you don't spend all your money. 94 00:04:45,520 --> 00:04:49,280 Speaker 1: You store some of it. But money currency dollars are 95 00:04:49,440 --> 00:04:52,359 Speaker 1: the worst. Are a horrible store of It's a horrible 96 00:04:52,360 --> 00:04:54,520 Speaker 1: place to store your value because that that value leaks, 97 00:04:54,960 --> 00:04:58,440 Speaker 1: It loses value very quickly. And so most people realize this, 98 00:04:58,440 --> 00:05:00,720 Speaker 1: which is why they're scrambling to buy anything they can 99 00:05:00,760 --> 00:05:04,800 Speaker 1: as fast as they can, including homes, including cars, including stocks, 100 00:05:04,839 --> 00:05:08,680 Speaker 1: including bitcoin, or mountain bikes or kayaks or whatever it 101 00:05:08,800 --> 00:05:10,920 Speaker 1: else is that you want to buy. Toilet paper, Some 102 00:05:11,000 --> 00:05:14,159 Speaker 1: people are stocking up on toilet paper. So what they're 103 00:05:14,160 --> 00:05:17,200 Speaker 1: saying is the store of value market typically historically has 104 00:05:17,240 --> 00:05:20,680 Speaker 1: been gold, but now bitcoin is overtaking that, and they 105 00:05:20,720 --> 00:05:24,000 Speaker 1: believe that over the next five years that store of 106 00:05:24,120 --> 00:05:27,600 Speaker 1: value market that gold is you know, pretty much dominated, 107 00:05:28,160 --> 00:05:30,960 Speaker 1: is going to be UM. More people are moving to bitcoin, 108 00:05:31,000 --> 00:05:32,720 Speaker 1: and they think over the next five years, as much 109 00:05:32,760 --> 00:05:34,960 Speaker 1: as fifty percent of the store of value market would 110 00:05:35,000 --> 00:05:36,440 Speaker 1: go into that, and they would put the value of 111 00:05:36,440 --> 00:05:39,520 Speaker 1: bitcoin at around a hundred thousand dollars on an annual 112 00:05:39,600 --> 00:05:46,000 Speaker 1: return of about that's pretty damn good. I'll take a return, 113 00:05:47,560 --> 00:05:50,200 Speaker 1: especially when you have averaged out over over that time, 114 00:05:50,800 --> 00:05:53,599 Speaker 1: especially when you look at gold, which has dropped three 115 00:05:53,640 --> 00:05:58,159 Speaker 1: point six percent in UM as part of the biggest 116 00:05:58,160 --> 00:06:03,480 Speaker 1: annual decline since heen. So while gold has dropped three 117 00:06:03,480 --> 00:06:07,000 Speaker 1: point six p during one of the most chaotic periods 118 00:06:07,120 --> 00:06:09,600 Speaker 1: in history, UM one of the highest. As a matter 119 00:06:09,600 --> 00:06:12,359 Speaker 1: of fact, we hit the highest inflation level that we've 120 00:06:12,400 --> 00:06:16,600 Speaker 1: seen in forty years, in four decades the most inflation, 121 00:06:16,760 --> 00:06:22,760 Speaker 1: and gold lost value. So it's not hard to understand 122 00:06:22,760 --> 00:06:26,200 Speaker 1: why people would rather store their value in something else. 123 00:06:27,000 --> 00:06:28,720 Speaker 1: They want to say that golden crypto. When you start 124 00:06:28,720 --> 00:06:33,040 Speaker 1: to think about them, there's a lot of the same attributes. UM. 125 00:06:33,160 --> 00:06:36,880 Speaker 1: You said that there's a finite supply, there's only twenty 126 00:06:36,960 --> 00:06:41,720 Speaker 1: one million, they say in this article crypto coins. Uh, 127 00:06:41,839 --> 00:06:43,760 Speaker 1: the only twenty one million crypto coins can be made, 128 00:06:43,760 --> 00:06:45,440 Speaker 1: So you've got this finite supply, just like you do 129 00:06:45,440 --> 00:06:47,760 Speaker 1: with gold. That is not accurate. I'm going to call 130 00:06:47,800 --> 00:06:50,760 Speaker 1: them out. There's a lot more than twenty one million 131 00:06:50,800 --> 00:06:54,640 Speaker 1: crypto coins. There's only twenty one million bit coins. So, 132 00:06:54,800 --> 00:06:59,080 Speaker 1: as I like to say, bitcoin not crypto h I 133 00:06:59,080 --> 00:07:01,000 Speaker 1: said in a previous set, meant that just like gold 134 00:07:01,000 --> 00:07:03,960 Speaker 1: has certain attributes and properties, and there's lots of other 135 00:07:04,000 --> 00:07:07,520 Speaker 1: metals palladium and platinum and silver and rhodium and grow 136 00:07:07,560 --> 00:07:10,880 Speaker 1: molley and steel and aluminum, blah blah blah, um, only 137 00:07:10,880 --> 00:07:14,760 Speaker 1: one has the attributes that gold has. And just like bitcoin, Um, 138 00:07:14,840 --> 00:07:19,840 Speaker 1: there's about, I don't know, fifteen thousand cryptocurrencies, but only 139 00:07:19,920 --> 00:07:23,440 Speaker 1: one has the attributes Open border list permission listens as 140 00:07:23,480 --> 00:07:26,440 Speaker 1: a resistant, immutable, et cetera. And so to his point, 141 00:07:26,560 --> 00:07:29,360 Speaker 1: his finite supply, bitcoin only has twenty one million. Other 142 00:07:29,360 --> 00:07:32,160 Speaker 1: cryptos have more. But that's the same as gold. Right. 143 00:07:32,200 --> 00:07:35,160 Speaker 1: In order for something to hold value, it has to 144 00:07:35,200 --> 00:07:40,800 Speaker 1: be scarce. All the all the basics of economics all 145 00:07:40,920 --> 00:07:44,080 Speaker 1: is based off of scarcity, which, of course we all 146 00:07:44,080 --> 00:07:46,440 Speaker 1: only have twenty four hours in the day, and so 147 00:07:46,560 --> 00:07:49,080 Speaker 1: our time is based off of scarcity, and everything that 148 00:07:49,080 --> 00:07:51,800 Speaker 1: we do in order to push our lives forward is 149 00:07:51,840 --> 00:07:56,200 Speaker 1: based off of that scarcity of time. And there's more 150 00:07:56,240 --> 00:07:59,480 Speaker 1: people than there are resources. Resources are finite, which means 151 00:07:59,520 --> 00:08:01,360 Speaker 1: we have scared city and resources which means that we're 152 00:08:01,360 --> 00:08:04,000 Speaker 1: all competing for more resources. UM. And so when you 153 00:08:04,040 --> 00:08:06,360 Speaker 1: have an unlimited money supply, when they can literally push 154 00:08:06,360 --> 00:08:08,360 Speaker 1: a button on a keyboard and print up trillions of 155 00:08:08,400 --> 00:08:10,720 Speaker 1: more dollars, it messes up this whole system. But that's 156 00:08:10,720 --> 00:08:13,400 Speaker 1: why gold has worked good for five thousand years because 157 00:08:13,400 --> 00:08:15,840 Speaker 1: of a finite supply. Now there is new gold coming 158 00:08:15,840 --> 00:08:18,360 Speaker 1: out of the ground on a regular basis. But Bitcoin 159 00:08:18,560 --> 00:08:24,040 Speaker 1: is programmed to never have more than twenty one million coins. Now, 160 00:08:24,600 --> 00:08:29,560 Speaker 1: some people say, yeah, but can't that be changed UM Theoretically, 161 00:08:29,920 --> 00:08:33,440 Speaker 1: I suppose it could. Theoretically, realistically probably not UM. In 162 00:08:33,520 --> 00:08:35,480 Speaker 1: order to get that changed, it would it would take 163 00:08:35,960 --> 00:08:39,440 Speaker 1: UM basically an attack on the network. It would go 164 00:08:39,559 --> 00:08:43,440 Speaker 1: through probably a year of battle, and if that happened, 165 00:08:43,480 --> 00:08:45,280 Speaker 1: it would probably destroy the network. But we would know 166 00:08:45,559 --> 00:08:48,080 Speaker 1: well in advance if that was ever going to happen Uh, 167 00:08:48,120 --> 00:08:49,560 Speaker 1: and we'd have plenty of time to figure that out. 168 00:08:49,600 --> 00:08:55,079 Speaker 1: Of course, like I said, that's theoretically realistically probably not um, 169 00:08:55,120 --> 00:08:57,680 Speaker 1: but that's the price. Now. Like I said, we're gonna 170 00:08:57,679 --> 00:09:01,720 Speaker 1: have Nick Body coming on as USC professor and he's 171 00:09:01,720 --> 00:09:04,160 Speaker 1: going to talk to us about the price being truth. 172 00:09:04,559 --> 00:09:07,200 Speaker 1: And then we're gonna talk about um something that I'm 173 00:09:07,240 --> 00:09:10,240 Speaker 1: super interested in, which is is the bitcoin e t 174 00:09:10,480 --> 00:09:13,199 Speaker 1: F and the paper supply of bitcoin going to artificially 175 00:09:13,200 --> 00:09:15,559 Speaker 1: suppress the price of bitcoin something I'm worried about. I'm 176 00:09:15,559 --> 00:09:18,400 Speaker 1: gonna be right back with Nick in just a second, uh, 177 00:09:18,400 --> 00:09:21,560 Speaker 1: talking about prices, truth and what's happening with the bitcoin 178 00:09:22,000 --> 00:09:24,600 Speaker 1: e t F. So don't go away, all right, Welcome back. 179 00:09:24,600 --> 00:09:26,360 Speaker 1: You are listening to the Mark Mo Show, and we 180 00:09:26,400 --> 00:09:29,960 Speaker 1: are talking about bitcoin, and we're talking about this decentralized revolution. 181 00:09:30,360 --> 00:09:32,719 Speaker 1: And I am joined in the studio now by one 182 00:09:32,720 --> 00:09:35,160 Speaker 1: of my good friends, Nick Botia. You can find him 183 00:09:35,200 --> 00:09:39,439 Speaker 1: on Twitter at time Value of BTC that stands for 184 00:09:39,480 --> 00:09:43,120 Speaker 1: Bitcoin time value of BTC and um. Nick is um 185 00:09:43,120 --> 00:09:45,840 Speaker 1: On the author of a book called The Layered Money, 186 00:09:45,840 --> 00:09:48,120 Speaker 1: which is an amazing read. I think, uh was I 187 00:09:48,160 --> 00:09:49,800 Speaker 1: think Preston pistaid it was like one of his top 188 00:09:49,800 --> 00:09:52,240 Speaker 1: books of the year. I think that was. That's pretty amazing. 189 00:09:52,240 --> 00:09:53,800 Speaker 1: He reads like hundreds of books a year, So a 190 00:09:53,800 --> 00:09:56,319 Speaker 1: good job on that, Nick. Um. And Nick, you're also 191 00:09:56,440 --> 00:10:00,200 Speaker 1: a adjunct professor I think of economics at US see 192 00:10:00,200 --> 00:10:03,920 Speaker 1: is that right? That's right at USC Marshall School of Business. Yeah, 193 00:10:03,960 --> 00:10:07,880 Speaker 1: so you are somebody very credential to talk about this. 194 00:10:07,920 --> 00:10:10,000 Speaker 1: So thanks for joining me today. Nick. Of course, good 195 00:10:10,000 --> 00:10:12,120 Speaker 1: to be with you. Mark. So, Um, something I want 196 00:10:12,160 --> 00:10:15,880 Speaker 1: to talk about, I know you talk about price is truth. 197 00:10:16,600 --> 00:10:20,680 Speaker 1: There's all the price takes into consideration, all of the 198 00:10:20,760 --> 00:10:26,079 Speaker 1: data that's out there. And something that I've been concerned 199 00:10:26,080 --> 00:10:27,920 Speaker 1: with for a couple of years is these et f 200 00:10:27,960 --> 00:10:30,840 Speaker 1: s coming into the market. Um. Caitlyn Long has been 201 00:10:30,880 --> 00:10:33,600 Speaker 1: talking about this, and Um, you have a little bit 202 00:10:33,640 --> 00:10:36,199 Speaker 1: of a country and view to this. Now. My fear 203 00:10:36,280 --> 00:10:38,480 Speaker 1: with this with this bitcoin market is I believe that 204 00:10:39,320 --> 00:10:42,200 Speaker 1: maybe it's too simple, but price moves off supply and demand. 205 00:10:42,920 --> 00:10:46,760 Speaker 1: So uh, if there's more some you know whatever, more 206 00:10:46,840 --> 00:10:48,920 Speaker 1: demand and lets than supply, then the price goes up. 207 00:10:49,120 --> 00:10:50,840 Speaker 1: And so if I was an institution or hedge fund 208 00:10:50,840 --> 00:10:52,760 Speaker 1: and I want to put a billion dollars into bitcoin, 209 00:10:52,840 --> 00:10:54,800 Speaker 1: I have to buy a billion dollars, take a billion 210 00:10:54,800 --> 00:10:58,160 Speaker 1: dollars off the market. I take supply off the market. 211 00:10:58,200 --> 00:11:00,560 Speaker 1: I'm putting demand into the market. The prices should rise. 212 00:11:00,920 --> 00:11:03,080 Speaker 1: But if there's a paper market for e t f 213 00:11:03,120 --> 00:11:05,840 Speaker 1: s like we have now, there's no it's all it's 214 00:11:05,880 --> 00:11:08,920 Speaker 1: all uh spot right, there's or there's no it's there's 215 00:11:08,920 --> 00:11:12,120 Speaker 1: no cash settled. I'm sorry, it's cash not physically settled. 216 00:11:12,480 --> 00:11:15,360 Speaker 1: So all I'm doing is betting on the price of bitcoin. 217 00:11:15,400 --> 00:11:18,080 Speaker 1: I'm not actually buying bitcoin the way I understand it. 218 00:11:18,280 --> 00:11:19,960 Speaker 1: And so that means instead of putting my billion dollars 219 00:11:20,000 --> 00:11:22,120 Speaker 1: and taking a billion dollars a bitcoin off the market 220 00:11:22,160 --> 00:11:24,559 Speaker 1: and and messing with the supplied tomand metrics, now I 221 00:11:24,600 --> 00:11:27,680 Speaker 1: can just put a billion dollars betting on that and 222 00:11:27,760 --> 00:11:32,320 Speaker 1: it artificially, um, it gives them artificial bitcoin. It doesn't 223 00:11:32,360 --> 00:11:36,200 Speaker 1: affect the supplied demand metrics. But you don't necessarily agree 224 00:11:36,240 --> 00:11:39,360 Speaker 1: with that. Give us your take on that. So yeah, 225 00:11:39,400 --> 00:11:43,200 Speaker 1: I think that bitcoin is very unique in that it 226 00:11:43,440 --> 00:11:48,200 Speaker 1: trades across all these exchanges around the world. Now, we 227 00:11:48,200 --> 00:11:51,560 Speaker 1: we do have paper products, derivative products, et F products 228 00:11:51,840 --> 00:11:55,560 Speaker 1: call it, you know, let's call them all paper products. Okay, uh, 229 00:11:55,600 --> 00:12:02,280 Speaker 1: these are bitcoin substitutes, not bitcoin, right. Bitcoin itself trades 230 00:12:02,400 --> 00:12:07,520 Speaker 1: on coin based pro bitfin x, cracking, all these exchanges 231 00:12:07,559 --> 00:12:13,960 Speaker 1: around the world, and these exchanges, these large, reputable exchanges, 232 00:12:14,280 --> 00:12:21,120 Speaker 1: have longstanding reputations of being able to satisfy withdrawals no 233 00:12:21,160 --> 00:12:26,480 Speaker 1: matter what the sizes, and for that reason, the price 234 00:12:26,600 --> 00:12:31,120 Speaker 1: that we see on those exchanges is the real bitcoin price. 235 00:12:33,320 --> 00:12:38,720 Speaker 1: The fact that ETFs and futures all trade, and even 236 00:12:38,760 --> 00:12:44,080 Speaker 1: bitcoin futures on exchanges like Finance, all those prices trade 237 00:12:44,679 --> 00:12:48,280 Speaker 1: along with let's say, the coin base and cracking price. 238 00:12:49,679 --> 00:12:54,800 Speaker 1: That means that the market of bitcoin is efficient across 239 00:12:55,400 --> 00:12:59,920 Speaker 1: multitude of platforms. You can have small arbitrage and people 240 00:13:00,080 --> 00:13:04,640 Speaker 1: and they're all there are strategies that are dedicated to 241 00:13:04,760 --> 00:13:09,160 Speaker 1: arbitraging the price just between exchanges, because you can, you know, 242 00:13:09,320 --> 00:13:13,640 Speaker 1: find ten dollar differences and go long and short and 243 00:13:14,000 --> 00:13:17,720 Speaker 1: arbitrage that trade. But the fact that these large bitcoin 244 00:13:17,800 --> 00:13:24,400 Speaker 1: exchanges have satisfied withdrawals for years and years means that 245 00:13:24,520 --> 00:13:30,920 Speaker 1: those prices are the real bitcoin price. And whatever. You know, 246 00:13:31,880 --> 00:13:33,960 Speaker 1: and I respect Caitlin a lot, and she's a friend. 247 00:13:34,880 --> 00:13:36,679 Speaker 1: What what she's saying is that they are all these 248 00:13:36,760 --> 00:13:41,239 Speaker 1: paper products, and you can have you know, unlimited, theoretically 249 00:13:41,320 --> 00:13:46,560 Speaker 1: unlimited leverage to short bitcoin through these paper products. While 250 00:13:46,600 --> 00:13:49,920 Speaker 1: I believe that, you know, that is in theory possible, 251 00:13:50,880 --> 00:13:53,880 Speaker 1: it doesn't mean that what the price that we observe 252 00:13:54,040 --> 00:13:56,480 Speaker 1: is not the real price. And that's what we're saying 253 00:13:56,520 --> 00:14:00,400 Speaker 1: when price is truth here. The price does actor in 254 00:14:00,679 --> 00:14:03,800 Speaker 1: everything that we know about bitcoin, including that there are 255 00:14:03,880 --> 00:14:09,000 Speaker 1: paper products and people can go naked short through derivatives 256 00:14:10,360 --> 00:14:13,679 Speaker 1: that aren't you know, backed by any real bitcoin. But 257 00:14:14,080 --> 00:14:18,360 Speaker 1: you know, on the exchanges, if people withdraw and the 258 00:14:18,600 --> 00:14:21,360 Speaker 1: bitcoin is there at the price that's given to them 259 00:14:21,440 --> 00:14:25,920 Speaker 1: on the screen, then that's what the bitcoin prices. Okay, 260 00:14:26,000 --> 00:14:28,720 Speaker 1: So it sounds like maybe there's two different conversations going 261 00:14:28,800 --> 00:14:34,200 Speaker 1: on here. So you're saying that whatever, whatever is happening 262 00:14:34,400 --> 00:14:37,280 Speaker 1: through all these exchanges and paper markets, etcetera, etcetera, etcetera, 263 00:14:37,560 --> 00:14:41,080 Speaker 1: the price is the truth. The price summarizes everything that's 264 00:14:41,080 --> 00:14:44,320 Speaker 1: going on out there, which which obviously is obvious. Yes, 265 00:14:44,440 --> 00:14:46,600 Speaker 1: that is the truth. And I get that. I think 266 00:14:46,680 --> 00:14:48,480 Speaker 1: what she's saying, and not to put words in her 267 00:14:48,480 --> 00:14:51,120 Speaker 1: mouth where I guess I'll say what what I have 268 00:14:51,320 --> 00:14:55,560 Speaker 1: a concern of is, while the price maybe truth and 269 00:14:55,920 --> 00:14:57,800 Speaker 1: actually I say the price is truth, I agree with 270 00:14:57,880 --> 00:15:00,520 Speaker 1: you on that, that doesn't mean that the price isn't 271 00:15:00,520 --> 00:15:03,480 Speaker 1: suppressed being the truth. So the price is the truth, 272 00:15:03,760 --> 00:15:06,920 Speaker 1: but but the but the price could be manipulated because 273 00:15:07,960 --> 00:15:11,840 Speaker 1: now we've inflated the supply through fake paper market. So 274 00:15:11,920 --> 00:15:14,040 Speaker 1: even though the price is the truth, couldn't it still 275 00:15:14,160 --> 00:15:20,880 Speaker 1: be artificially suppressed? Of course, And you know that's the 276 00:15:20,960 --> 00:15:23,680 Speaker 1: other side of it is I'm not even arguing that 277 00:15:23,800 --> 00:15:26,040 Speaker 1: it can't be suppressed or that you know, it could 278 00:15:26,080 --> 00:15:29,239 Speaker 1: be higher if it wasn't wasn't absent for these instruments. 279 00:15:30,000 --> 00:15:35,360 Speaker 1: But that's not something that we can do anything about. 280 00:15:35,760 --> 00:15:41,640 Speaker 1: It's not something that we can change. Um, the financial 281 00:15:41,760 --> 00:15:45,440 Speaker 1: powers that be if that's their strategy to suppress the 282 00:15:45,480 --> 00:15:49,000 Speaker 1: price of bitcoin, or some you know, large whale trader 283 00:15:49,720 --> 00:15:52,000 Speaker 1: that's their strategy to suppress the price of bitcoin over 284 00:15:52,080 --> 00:15:55,120 Speaker 1: the long term, it's not something that we can change. 285 00:15:55,360 --> 00:15:59,480 Speaker 1: And um, it's not I think, you know, we get 286 00:15:59,520 --> 00:16:03,440 Speaker 1: a lot of background in contact from this from the 287 00:16:03,480 --> 00:16:09,080 Speaker 1: gold price suppression scheme and the London bullion trade and 288 00:16:09,400 --> 00:16:13,600 Speaker 1: and how that's worked over the last several decades and 289 00:16:13,680 --> 00:16:16,960 Speaker 1: that does energize some of this conversation. So I do 290 00:16:17,200 --> 00:16:21,960 Speaker 1: want to acknowledge the work done by data and the 291 00:16:22,120 --> 00:16:26,280 Speaker 1: discoveries that were made in how paper markets are used 292 00:16:26,360 --> 00:16:30,560 Speaker 1: to suppress the gold price and have been for years, um, 293 00:16:31,040 --> 00:16:35,880 Speaker 1: but gold has also risen in price despite that, Gold 294 00:16:36,000 --> 00:16:40,560 Speaker 1: has taken a geopolitical you know, importance in the last 295 00:16:40,920 --> 00:16:44,520 Speaker 1: fifteen years since the oh seven or eight financial prices 296 00:16:44,920 --> 00:16:50,520 Speaker 1: because of that. Russia China are you know, making huge 297 00:16:51,080 --> 00:16:56,840 Speaker 1: geopolitical moves because of gold still despite whatever London price 298 00:16:56,880 --> 00:17:02,120 Speaker 1: suppression scheme is going on, and so bitcoin will also 299 00:17:02,320 --> 00:17:05,159 Speaker 1: charge on in the face. I just my point is 300 00:17:05,200 --> 00:17:08,320 Speaker 1: that I'm not really concerned about whether or not the 301 00:17:08,680 --> 00:17:12,320 Speaker 1: bitcoin prices being suppressed to these instruments, because it is 302 00:17:14,720 --> 00:17:19,920 Speaker 1: a market that has a transparent settlement mechanism, very transparent, 303 00:17:20,080 --> 00:17:23,879 Speaker 1: the most transparent of all time. So we should celebrate that, 304 00:17:24,240 --> 00:17:27,000 Speaker 1: and um, you know, it's it's just not a concern 305 00:17:27,080 --> 00:17:29,919 Speaker 1: to me. Okay, I want to I want to dig 306 00:17:30,000 --> 00:17:31,879 Speaker 1: into a couple of those things that you talked about 307 00:17:31,920 --> 00:17:34,120 Speaker 1: there that I think are a couple of good points. 308 00:17:34,160 --> 00:17:36,280 Speaker 1: The questions that I have while talking about that you're 309 00:17:36,280 --> 00:17:39,040 Speaker 1: listening to the Mark MOA show. We're talking about bitcoin 310 00:17:39,119 --> 00:17:42,080 Speaker 1: and the decentralized revolution. I'm in the studio with Nick 311 00:17:42,119 --> 00:17:44,080 Speaker 1: body up Um. You can find them on Twitter at 312 00:17:44,160 --> 00:17:48,639 Speaker 1: time Value of btc. We're talking about bitcoin, the prices truth. 313 00:17:48,760 --> 00:17:51,800 Speaker 1: We're talking about this this new E t F paper 314 00:17:51,920 --> 00:17:55,640 Speaker 1: market and the possibility of its suppressing the price. We're 315 00:17:55,640 --> 00:17:58,680 Speaker 1: gonna dig into more about that and some of the risks, UM. 316 00:17:58,800 --> 00:18:01,040 Speaker 1: So don't go away. We were back, all right, welcome back. 317 00:18:01,080 --> 00:18:03,560 Speaker 1: You're listening to the Markma Show. We're talking about bitcoin, 318 00:18:03,680 --> 00:18:06,320 Speaker 1: and we're talking about this decentralized revolution, and today we're 319 00:18:06,359 --> 00:18:09,280 Speaker 1: digging into a little bit deeper into the inner workings 320 00:18:09,320 --> 00:18:12,159 Speaker 1: of this financial system. I'm in the studio with Nick Bodia. 321 00:18:12,240 --> 00:18:14,639 Speaker 1: You can find them on Twitter at time Value of 322 00:18:15,040 --> 00:18:19,040 Speaker 1: btc um. He also writes a newsletter. He's an adjunct 323 00:18:19,160 --> 00:18:22,640 Speaker 1: professor at usc UM and he also writes a newsletter 324 00:18:22,680 --> 00:18:24,560 Speaker 1: that I've been reading and if you're interested in these topics, 325 00:18:24,680 --> 00:18:26,720 Speaker 1: you should subscribe Nick. What's the name of that newsletter. 326 00:18:28,000 --> 00:18:31,000 Speaker 1: It's called the Bitcoin Layer on sub Stack, The Bitcoin 327 00:18:31,080 --> 00:18:32,840 Speaker 1: Layer on sub Stack. I recommend each of you to 328 00:18:32,880 --> 00:18:35,919 Speaker 1: go out and subscribe to that. It's so much information Uh, 329 00:18:36,320 --> 00:18:38,240 Speaker 1: it's too cheap. Nick. I'm talking to you about that later. 330 00:18:38,280 --> 00:18:40,560 Speaker 1: But anyway, UM, back to what we were talking about, 331 00:18:40,640 --> 00:18:43,720 Speaker 1: which is, um, you know, the price being truth and 332 00:18:43,880 --> 00:18:47,000 Speaker 1: the e t F market. Now to your point, Um, 333 00:18:47,040 --> 00:18:48,720 Speaker 1: you you went in and kind of talked about the 334 00:18:48,760 --> 00:18:51,879 Speaker 1: gold market, and you know, in the gold market, Uh, 335 00:18:53,200 --> 00:18:56,719 Speaker 1: you know, estimates are there's potentially five hundred paper ounces 336 00:18:56,840 --> 00:19:00,399 Speaker 1: for everyone physical ounce that's being traded. Um. You know, 337 00:19:00,760 --> 00:19:05,040 Speaker 1: massive manipulation with naked spoofing and naked shorting and things 338 00:19:05,080 --> 00:19:06,879 Speaker 1: like that. You know, we've seen JP Morgan to pay 339 00:19:06,920 --> 00:19:09,960 Speaker 1: out massive fines for things like that. Um, And so 340 00:19:10,400 --> 00:19:12,560 Speaker 1: you know there's no doubt that that's that's being done. Now, 341 00:19:13,119 --> 00:19:16,200 Speaker 1: I get that with bitcoin that even if you manipulate 342 00:19:16,320 --> 00:19:18,800 Speaker 1: the price, it doesn't affect the network. It's still borderless, 343 00:19:18,800 --> 00:19:22,080 Speaker 1: permission list, censorship, resisting, immutable, blah blah blah. Um. But 344 00:19:22,320 --> 00:19:25,080 Speaker 1: I would, in my opinion, maybe one of the greatest 345 00:19:25,440 --> 00:19:29,440 Speaker 1: risks to bitcoin isn't that Probably the two biggest risk 346 00:19:29,520 --> 00:19:31,960 Speaker 1: in my opinion are one that the nodes will become 347 00:19:32,000 --> 00:19:34,639 Speaker 1: centralized if people don't run nodes, and then you know, 348 00:19:34,720 --> 00:19:37,080 Speaker 1: coin bases and exchanges get too much power that's that's 349 00:19:37,080 --> 00:19:39,399 Speaker 1: probably one. But the second one is that the price 350 00:19:39,480 --> 00:19:42,359 Speaker 1: could be so artificially manipulated that people would lose interest 351 00:19:42,680 --> 00:19:44,959 Speaker 1: and then countries, let like take take action like Al 352 00:19:44,960 --> 00:19:47,760 Speaker 1: Savador for example, If the price gets dropped in half 353 00:19:47,800 --> 00:19:49,359 Speaker 1: when they've put their whole money into it, other countries 354 00:19:49,440 --> 00:19:51,600 Speaker 1: gonna follow suit. So I think there is a risk 355 00:19:51,720 --> 00:19:55,720 Speaker 1: there in my opinion. And so I see this possibility 356 00:19:55,800 --> 00:19:59,800 Speaker 1: to manipulate the supply demand, manipulate the price could have 357 00:20:00,000 --> 00:20:01,600 Speaker 1: of an effect. And I know you said it kind 358 00:20:01,640 --> 00:20:06,119 Speaker 1: of is what it is, um, but I guess it 359 00:20:06,240 --> 00:20:07,840 Speaker 1: is what is. But do you see that as being 360 00:20:07,880 --> 00:20:09,280 Speaker 1: a risk? I mean, do you see that if they 361 00:20:09,400 --> 00:20:12,080 Speaker 1: build up this paper market enough that they could that 362 00:20:12,160 --> 00:20:14,840 Speaker 1: they could use that to artificially suppress the price over 363 00:20:14,920 --> 00:20:19,280 Speaker 1: long term. So another aspect of the whole prices truth 364 00:20:19,320 --> 00:20:23,560 Speaker 1: thing is that, uh, the price tells a story through time. 365 00:20:23,920 --> 00:20:28,320 Speaker 1: So I look at I used price charts to tell 366 00:20:28,400 --> 00:20:31,200 Speaker 1: me what's happening through time, and I look at Bitcoin's 367 00:20:31,240 --> 00:20:35,120 Speaker 1: price chart, and I'd like to use realized value as 368 00:20:35,840 --> 00:20:39,600 Speaker 1: realized market cap as one of my metrics that anchors 369 00:20:40,440 --> 00:20:44,080 Speaker 1: how I'm looking at the price and the realized you know, 370 00:20:44,200 --> 00:20:47,600 Speaker 1: realized value of bitcoin is um in the thirties, right, 371 00:20:47,840 --> 00:20:51,520 Speaker 1: that's what that's the the m v r V. Yeah, 372 00:20:51,680 --> 00:20:54,240 Speaker 1: so that's the ratio between the market value and the 373 00:20:54,320 --> 00:20:57,000 Speaker 1: realized value. So right now we're you know, at about 374 00:20:57,080 --> 00:21:00,359 Speaker 1: one and a half. And what that means means is 375 00:21:00,440 --> 00:21:03,920 Speaker 1: that word about you know, premium to what the realized 376 00:21:04,040 --> 00:21:09,720 Speaker 1: value is. The realized value is a snapshot of where 377 00:21:10,080 --> 00:21:15,240 Speaker 1: the bitcoin price was when bitcoin transaction transacted on the 378 00:21:15,359 --> 00:21:20,440 Speaker 1: chain itself, not necessarily on exchanges, and so it is 379 00:21:20,560 --> 00:21:26,960 Speaker 1: a slower moving um target of what bitcoins let's say 380 00:21:27,000 --> 00:21:30,480 Speaker 1: fair value. I don't explicitly want to call it a 381 00:21:30,560 --> 00:21:34,760 Speaker 1: fairy value, but it is a valuation metric. Realized price 382 00:21:34,960 --> 00:21:39,160 Speaker 1: is a valuation metric that we can use to think 383 00:21:39,240 --> 00:21:42,200 Speaker 1: about bitcoin over a longer time horizon. Just like we 384 00:21:42,600 --> 00:21:47,399 Speaker 1: use two hundred day or fifty week moving averages to 385 00:21:48,080 --> 00:21:51,119 Speaker 1: smooth price through time, realized values a way to do that. 386 00:21:51,480 --> 00:21:55,200 Speaker 1: So weird about one and a half times realized value today. 387 00:21:55,520 --> 00:21:59,840 Speaker 1: So and for much of two thousand and twenty one, 388 00:22:00,560 --> 00:22:05,159 Speaker 1: we've been approaching or touching up against these levels that 389 00:22:05,280 --> 00:22:10,080 Speaker 1: are three plus, so a very extended valuation. When you 390 00:22:10,119 --> 00:22:13,080 Speaker 1: start to get to you know, quote unquote bubble territory 391 00:22:13,200 --> 00:22:17,000 Speaker 1: for for for bitcoin. So in the last twelve months, 392 00:22:17,119 --> 00:22:20,040 Speaker 1: what can we observe from the price we've we we 393 00:22:20,160 --> 00:22:23,200 Speaker 1: observed that the price has gotten very hot at times 394 00:22:23,760 --> 00:22:26,160 Speaker 1: and has cooled off to a point where it's still 395 00:22:26,840 --> 00:22:31,520 Speaker 1: above this long term fundamental metric. So where's the price suppression? 396 00:22:31,920 --> 00:22:35,200 Speaker 1: Let's be honest, it's not. To me, I don't observe it. 397 00:22:36,960 --> 00:22:40,960 Speaker 1: You could say if the ratio of market value to 398 00:22:41,040 --> 00:22:44,040 Speaker 1: realize value was less than one for a sustained period 399 00:22:44,080 --> 00:22:48,440 Speaker 1: of time and was exhibiting some random behavior, but it's not. 400 00:22:48,800 --> 00:22:54,760 Speaker 1: Bitcoin has seen huge rallies which are very characteristic of bitcoin, 401 00:22:55,280 --> 00:22:58,840 Speaker 1: followed by huge liquidations due to leverage. And we can 402 00:22:58,880 --> 00:23:03,720 Speaker 1: actually see an interest in the futures market. Collapse means 403 00:23:03,840 --> 00:23:09,280 Speaker 1: contracts that were naked long go away when the price dumps, 404 00:23:10,480 --> 00:23:15,000 Speaker 1: and all very normal and healthy market activity. So where's 405 00:23:15,040 --> 00:23:18,719 Speaker 1: the price suppression? I don't think that it's an argument 406 00:23:18,840 --> 00:23:21,760 Speaker 1: we have to get into when we're you know, looking 407 00:23:21,840 --> 00:23:27,200 Speaker 1: about you know, and to Caitlin's point and credit, her 408 00:23:27,359 --> 00:23:31,080 Speaker 1: job is as a banker to make sure she offers 409 00:23:31,160 --> 00:23:35,160 Speaker 1: a product that can you know, she's a big advocate 410 00:23:35,200 --> 00:23:38,200 Speaker 1: of proof of keys, which means I have a bitcoin product. 411 00:23:38,640 --> 00:23:41,720 Speaker 1: I've signed this transaction to the Bitcoin Ledger where you 412 00:23:41,840 --> 00:23:45,040 Speaker 1: can see I have the bitcoin for real, and so 413 00:23:45,160 --> 00:23:48,919 Speaker 1: you can invest in my product with confidence. She's a banker, 414 00:23:49,080 --> 00:23:52,320 Speaker 1: that's what she's trying to do and market. So that's 415 00:23:52,440 --> 00:23:55,320 Speaker 1: her talking her book that we have to, you know, 416 00:23:55,600 --> 00:23:57,560 Speaker 1: have these products that have proof of keys and not 417 00:23:58,160 --> 00:24:01,760 Speaker 1: fake potentially fake bitcoin, and good on her for trying 418 00:24:01,800 --> 00:24:04,680 Speaker 1: to do that. It's not my concern. I'm you know, 419 00:24:05,119 --> 00:24:07,680 Speaker 1: hold your own keys. If you're really interested in protecting 420 00:24:07,720 --> 00:24:09,880 Speaker 1: your own bitcoin, and if you're not going to hold 421 00:24:09,920 --> 00:24:13,880 Speaker 1: your own keys, demand that your custodians have proof of keys. 422 00:24:14,080 --> 00:24:15,960 Speaker 1: And if you're not going to do that, then understand 423 00:24:16,000 --> 00:24:21,679 Speaker 1: the risks of potentially paper bitcoin being practionally reserved. Now, um, 424 00:24:22,000 --> 00:24:24,680 Speaker 1: real quick, if you could give us the short version 425 00:24:24,800 --> 00:24:27,680 Speaker 1: of what you mean by the real the market value 426 00:24:27,760 --> 00:24:31,280 Speaker 1: versus the realized value. So the realized value is kind 427 00:24:31,280 --> 00:24:34,119 Speaker 1: of the price point that people have received it at 428 00:24:34,240 --> 00:24:36,560 Speaker 1: versus where the market value is today. So the majority 429 00:24:36,600 --> 00:24:39,200 Speaker 1: of bitcoin holders are actually in profit is that something 430 00:24:39,280 --> 00:24:42,720 Speaker 1: like you're talking about? Yeah, So the majority of bitcoin 431 00:24:43,040 --> 00:24:47,960 Speaker 1: holders are in profit based on where what we observe 432 00:24:48,160 --> 00:24:53,000 Speaker 1: from bitcoin's blockchain, so separate in your mind that people 433 00:24:53,119 --> 00:24:57,360 Speaker 1: trade on exchanges, but then they actually transact using bitcoin 434 00:24:57,480 --> 00:25:02,520 Speaker 1: when they, for example, withdraw from an exchange. So those 435 00:25:03,040 --> 00:25:06,960 Speaker 1: on chain bitcoin transactions, when those happen, we strike the 436 00:25:07,040 --> 00:25:13,520 Speaker 1: price and measure bitcoins market capitalization on a realized basis, 437 00:25:13,640 --> 00:25:19,119 Speaker 1: meaning what the on chain activity reflects. And then we 438 00:25:19,240 --> 00:25:22,359 Speaker 1: have a market price, which is where bitcoin trades on exchanges, 439 00:25:22,920 --> 00:25:26,760 Speaker 1: and we can use the market price and the realized 440 00:25:26,840 --> 00:25:31,879 Speaker 1: price in a ratio to give us context. It It 441 00:25:32,040 --> 00:25:35,560 Speaker 1: doesn't mean that the ratio should be one. It doesn't 442 00:25:35,600 --> 00:25:38,440 Speaker 1: mean that it can never get to five. That's it's 443 00:25:38,480 --> 00:25:41,320 Speaker 1: just like we use price to earnings ratio in equities. Right, 444 00:25:41,600 --> 00:25:44,359 Speaker 1: we have the price, which is what the market trades, 445 00:25:44,680 --> 00:25:47,840 Speaker 1: We have the earnings, which is the real number that 446 00:25:47,920 --> 00:25:50,560 Speaker 1: the company publishes, and we have a ratio between them, 447 00:25:50,840 --> 00:25:53,600 Speaker 1: and we can use that ratio to give us context 448 00:25:53,720 --> 00:25:57,760 Speaker 1: and to make investment decisions sometimes or to guide us 449 00:25:58,359 --> 00:26:00,560 Speaker 1: or to give us some story or say all about 450 00:26:00,800 --> 00:26:03,480 Speaker 1: what's happening. So I'd like to use and I've written 451 00:26:03,520 --> 00:26:06,879 Speaker 1: about that at the Bitcoin Layer. The article was called 452 00:26:07,440 --> 00:26:11,400 Speaker 1: the four year Cycle is dead, long live bitcoin, because UM, 453 00:26:11,720 --> 00:26:16,440 Speaker 1: I think that the four year cycle is muting itself 454 00:26:16,720 --> 00:26:19,879 Speaker 1: in a way, and we can observe that, observe that 455 00:26:20,080 --> 00:26:24,880 Speaker 1: with ratios like m v r V. Yeah, I want 456 00:26:24,920 --> 00:26:26,560 Speaker 1: to I want to dig into that article that you're 457 00:26:26,600 --> 00:26:29,240 Speaker 1: at the four year cycle is dead. We'll talk about that, UM, 458 00:26:29,800 --> 00:26:32,520 Speaker 1: because bitcoin moves on these four year having cycles. Every 459 00:26:32,560 --> 00:26:34,399 Speaker 1: four years, the amount of bitcoin being produced on a 460 00:26:34,480 --> 00:26:37,040 Speaker 1: daily basis by the miners gets cut in half. And 461 00:26:37,119 --> 00:26:39,320 Speaker 1: typically people have looked at these four year having cycles 462 00:26:39,359 --> 00:26:43,879 Speaker 1: and then said, well, approximately eighteen months after you know, having, 463 00:26:44,040 --> 00:26:46,080 Speaker 1: the market peaks, But like, really, we don't have enough 464 00:26:46,200 --> 00:26:47,719 Speaker 1: data to back that app. So I want to dig 465 00:26:47,760 --> 00:26:50,440 Speaker 1: into that with you. UM. In a minute, you're listening 466 00:26:50,440 --> 00:26:52,200 Speaker 1: to Mark Moss talking about bitcoin in the studio with 467 00:26:52,280 --> 00:26:54,920 Speaker 1: Nick Bodia. You can find them on Twitter at time. 468 00:26:55,160 --> 00:26:59,080 Speaker 1: Value of BTC is also the author of the book 469 00:26:59,119 --> 00:27:02,800 Speaker 1: called Layered Money, which I've read and I love it. UM. 470 00:27:03,280 --> 00:27:05,400 Speaker 1: I've referenced it quite a bit, So checked out that book. 471 00:27:05,520 --> 00:27:09,000 Speaker 1: And he also writes a newsletter, the Bitcoin Layer dot 472 00:27:09,080 --> 00:27:11,600 Speaker 1: sub stack dot com, so check those out as well. 473 00:27:12,280 --> 00:27:15,479 Speaker 1: We've been talking about UM the price of bitcoin, UM, 474 00:27:15,600 --> 00:27:18,760 Speaker 1: the market value of bitcoin versus the realized value of bitcoin, 475 00:27:18,840 --> 00:27:21,960 Speaker 1: and then the potential for these paper bitcoins, these e 476 00:27:22,040 --> 00:27:25,200 Speaker 1: t F to potentially suppress for manipulated price. We're gonna 477 00:27:25,240 --> 00:27:27,000 Speaker 1: come back in a minute and talk about the end 478 00:27:27,080 --> 00:27:29,679 Speaker 1: of the four year cycle. Don't go away, hey, welcome back. 479 00:27:29,720 --> 00:27:31,720 Speaker 1: You're listening to the Markma Show where we're talking about 480 00:27:31,760 --> 00:27:35,920 Speaker 1: bitcoin and talking about the decentralized revolution each and every week, 481 00:27:35,960 --> 00:27:38,680 Speaker 1: trying to bring you the most up to date information, 482 00:27:38,880 --> 00:27:41,800 Speaker 1: the education and special guests to give you even more 483 00:27:41,840 --> 00:27:44,960 Speaker 1: insight into the market. Understanding bitcoin isn't easy. There's a 484 00:27:45,040 --> 00:27:47,440 Speaker 1: lot of things going on, but it's worth the time. 485 00:27:47,480 --> 00:27:49,479 Speaker 1: It's worth your time, it's worth your attention to put 486 00:27:49,520 --> 00:27:51,399 Speaker 1: into it. I'm in the studio with Nick body Up. 487 00:27:51,560 --> 00:27:54,360 Speaker 1: You can find him on Twitter at time Value of BTC. 488 00:27:54,520 --> 00:27:56,639 Speaker 1: He's the author of the book called Layered Money, and 489 00:27:56,800 --> 00:28:00,159 Speaker 1: he writes a awesome newsletter called the Bitcoin Layer at 490 00:28:00,200 --> 00:28:03,399 Speaker 1: sub Stack. Check out those options. Um now, Nick Um, 491 00:28:03,480 --> 00:28:06,240 Speaker 1: you wrote an article recently. I subscribed to your newsletter 492 00:28:06,240 --> 00:28:08,120 Speaker 1: and everybody else should as well if you care about 493 00:28:08,119 --> 00:28:10,600 Speaker 1: these subjects, which you do. If you're listening, um, and 494 00:28:10,680 --> 00:28:12,840 Speaker 1: you wrote one called the four Year cycle is dead 495 00:28:13,880 --> 00:28:15,879 Speaker 1: and I and I said before the break, right, we 496 00:28:15,960 --> 00:28:18,600 Speaker 1: know that bitcoin has these four year having cycles UM 497 00:28:18,640 --> 00:28:21,359 Speaker 1: and people have been trying to guess where the top 498 00:28:21,520 --> 00:28:23,119 Speaker 1: is in the market based off of where we are 499 00:28:23,359 --> 00:28:26,000 Speaker 1: having cycle. You said the four year cycle is dead. 500 00:28:27,400 --> 00:28:31,520 Speaker 1: What does that mean? Yeah, so bitcoin has uh in 501 00:28:31,640 --> 00:28:34,920 Speaker 1: two thousand and thirteen and two thousand and seventeen had 502 00:28:35,680 --> 00:28:40,760 Speaker 1: these massive run ups and parabolic increases in price, and 503 00:28:40,880 --> 00:28:46,960 Speaker 1: they correlated perfectly with uh lag. After the havings, which 504 00:28:47,000 --> 00:28:50,720 Speaker 1: are when you know, every four years or so when 505 00:28:50,760 --> 00:28:56,800 Speaker 1: bitcoins supply increase has um and you know, stays that 506 00:28:56,880 --> 00:28:59,640 Speaker 1: way for the next four years. And it does make 507 00:28:59,680 --> 00:29:03,440 Speaker 1: sense that as bitcoin becomes more scarce UM and it's 508 00:29:04,080 --> 00:29:08,320 Speaker 1: demand is still increasing on a on an exponential adoption curve, 509 00:29:08,800 --> 00:29:12,280 Speaker 1: that we could have these supply shocks and massive run 510 00:29:12,360 --> 00:29:14,920 Speaker 1: ups in price. And it's been the theory for a 511 00:29:15,000 --> 00:29:21,360 Speaker 1: long time across bitcoin in general that havings lead to 512 00:29:22,280 --> 00:29:28,680 Speaker 1: these parabolic increases in price. We would have another crash 513 00:29:28,880 --> 00:29:32,200 Speaker 1: after that and you know, this big winter bear market. 514 00:29:32,680 --> 00:29:36,680 Speaker 1: But what we saw in is Bitcoin's behavior change a 515 00:29:36,760 --> 00:29:45,240 Speaker 1: little bit, and it didn't. It didn't resemble over Bitcoin 516 00:29:45,360 --> 00:29:49,040 Speaker 1: had a nice increase. It was a less than increase UM, 517 00:29:49,200 --> 00:29:52,360 Speaker 1: but it had this long mini bear market during the 518 00:29:52,480 --> 00:29:56,200 Speaker 1: summer and um, it just it didn't follow that exact 519 00:29:56,400 --> 00:30:00,320 Speaker 1: four year pattern that it had been showing. So for 520 00:30:00,480 --> 00:30:02,760 Speaker 1: that reason, I think the four your cycle is dead 521 00:30:03,440 --> 00:30:08,440 Speaker 1: doesn't mean bitcoin won't respond in price to havings anymore. Um. 522 00:30:08,720 --> 00:30:10,880 Speaker 1: But the point of the article was to show that 523 00:30:12,360 --> 00:30:17,920 Speaker 1: with much more sophisticated hedging tools, miners and market other 524 00:30:18,000 --> 00:30:22,280 Speaker 1: market participants that respond to the supply shock of the 525 00:30:22,400 --> 00:30:27,400 Speaker 1: having itself can spread out their risk over products and 526 00:30:27,640 --> 00:30:31,720 Speaker 1: over time. The time aspect is really key here. It's 527 00:30:31,760 --> 00:30:34,400 Speaker 1: not just that you can hedge using the options market 528 00:30:34,520 --> 00:30:38,360 Speaker 1: or the futures market. It's that there's a whole risk curve, 529 00:30:39,320 --> 00:30:43,840 Speaker 1: an option curve, and you know, six to eighteen months 530 00:30:43,920 --> 00:30:47,720 Speaker 1: out options and futures products that you can engage in 531 00:30:48,400 --> 00:30:53,000 Speaker 1: to mitigate your future price risk if you are a 532 00:30:53,120 --> 00:30:58,920 Speaker 1: physical user of bitcoin itself. And that sophistication of the 533 00:30:59,000 --> 00:31:05,640 Speaker 1: hedging market reduces volatility around the having events even if 534 00:31:05,720 --> 00:31:09,440 Speaker 1: measured on a four year period, and so having still 535 00:31:09,640 --> 00:31:12,840 Speaker 1: might have a huge effect on price. But this whole 536 00:31:13,160 --> 00:31:16,560 Speaker 1: idea that every four years we're going to have a 537 00:31:16,840 --> 00:31:24,120 Speaker 1: massive bubble and a massive crash might be over UM, 538 00:31:24,280 --> 00:31:28,360 Speaker 1: but still expect you know, large volatility from bitcoin for 539 00:31:28,520 --> 00:31:31,800 Speaker 1: the time being. Well, I think, um, you know, in 540 00:31:31,880 --> 00:31:34,479 Speaker 1: the past, we've seen you know, huge draw downs, drawns, 541 00:31:34,920 --> 00:31:38,160 Speaker 1: draw downs, and we've always expected I think most people 542 00:31:38,200 --> 00:31:40,840 Speaker 1: have expected that as bitcoin continues to get bigger and bigger, 543 00:31:40,920 --> 00:31:43,840 Speaker 1: that the volatility goes down, down, down, And so we've 544 00:31:43,880 --> 00:31:46,080 Speaker 1: gone from draw downs, apes and draw downs. In this year, 545 00:31:46,120 --> 00:31:49,520 Speaker 1: we've got a draw down. I mean, it wasn't small, right, 546 00:31:49,600 --> 00:31:52,120 Speaker 1: and so maybe that was the maybe that was the 547 00:31:52,800 --> 00:31:55,080 Speaker 1: big crash that we were expecting a draw down was 548 00:31:55,360 --> 00:31:57,120 Speaker 1: you know, like I said, that that's that's nothing small. 549 00:31:57,800 --> 00:31:59,280 Speaker 1: Another thing that I was thinking that when as you 550 00:31:59,360 --> 00:32:01,120 Speaker 1: were talking and and you're talking about these these supply 551 00:32:01,240 --> 00:32:04,560 Speaker 1: demand UM metrics kind of changing, and some of that 552 00:32:04,680 --> 00:32:06,560 Speaker 1: based off of these products that are available for them 553 00:32:06,600 --> 00:32:08,080 Speaker 1: to hedge their bets, which you know, a lot of 554 00:32:08,160 --> 00:32:11,160 Speaker 1: these future markets actually got their start from farming, where 555 00:32:11,200 --> 00:32:12,840 Speaker 1: they did have to hedge their bets, right, they didn't 556 00:32:12,840 --> 00:32:15,520 Speaker 1: want to have a bad croppy or something like that. UM. 557 00:32:15,600 --> 00:32:18,240 Speaker 1: But also something that I've been noticing specifically in the 558 00:32:18,320 --> 00:32:20,960 Speaker 1: miners that are mostly affected by this this this supply 559 00:32:21,080 --> 00:32:24,120 Speaker 1: demand is that um, you know, just in the last 560 00:32:24,160 --> 00:32:27,640 Speaker 1: several months, we've seen six or eight different mining companies 561 00:32:27,720 --> 00:32:31,360 Speaker 1: go public and raise hundreds of millions of not billions 562 00:32:31,400 --> 00:32:36,000 Speaker 1: of dollars, and so they're raising basically almost free money, 563 00:32:36,160 --> 00:32:40,400 Speaker 1: free debt um and they're going into mining and their 564 00:32:40,520 --> 00:32:42,280 Speaker 1: goals are they don't they don't need to sell that 565 00:32:42,320 --> 00:32:45,200 Speaker 1: bitcoin anymore. So they have the products to hedge on 566 00:32:45,360 --> 00:32:47,640 Speaker 1: one side, but on the other side, they've also used 567 00:32:47,680 --> 00:32:50,600 Speaker 1: the market and the low low rates to raise this 568 00:32:50,760 --> 00:32:53,200 Speaker 1: debt where they don't have to sell the bitcoin either, 569 00:32:53,240 --> 00:32:56,200 Speaker 1: and so that's got to dramatically change the markup. And 570 00:32:56,240 --> 00:32:58,520 Speaker 1: then you have that that dynamic as well as the 571 00:32:58,600 --> 00:33:00,400 Speaker 1: institutional players that have come in and you know, the 572 00:33:00,440 --> 00:33:02,920 Speaker 1: Michael Sailor being the kind of main archetype there and 573 00:33:03,000 --> 00:33:05,760 Speaker 1: he's like, I'm never selling. And when you have these 574 00:33:05,840 --> 00:33:09,080 Speaker 1: institutional players, you know, Warren Buffett's own Coca Cola for 575 00:33:09,240 --> 00:33:11,320 Speaker 1: like sixty years, right, Like, they don't come in to 576 00:33:11,400 --> 00:33:13,680 Speaker 1: just buy and sell real quickly. So I guess the 577 00:33:14,240 --> 00:33:18,280 Speaker 1: makeup of the buyers, the change in the mining, and 578 00:33:18,760 --> 00:33:21,800 Speaker 1: the products being available, like you said, probably all play 579 00:33:21,840 --> 00:33:25,400 Speaker 1: into just change in the dynamics of that completely. Yeah, 580 00:33:25,920 --> 00:33:30,360 Speaker 1: we we have a new market structure in than we 581 00:33:30,480 --> 00:33:37,920 Speaker 1: did in it's just different players. The size is unlike 582 00:33:38,000 --> 00:33:42,480 Speaker 1: anything we saw five years ago. We have public companies. 583 00:33:43,200 --> 00:33:47,560 Speaker 1: You mentioned Sailor. He did a great long interview with 584 00:33:47,680 --> 00:33:50,000 Speaker 1: Peter McCormick, who I know that you just went on 585 00:33:50,800 --> 00:33:53,920 Speaker 1: UM and they talked about the I p o s 586 00:33:54,000 --> 00:33:58,440 Speaker 1: of mining companies and it really, um it shifted my 587 00:33:58,560 --> 00:34:02,720 Speaker 1: thinking about it a little bit, where uh, basically the 588 00:34:02,840 --> 00:34:07,840 Speaker 1: importance of these publicly traded mining companies the prospect that 589 00:34:07,960 --> 00:34:12,200 Speaker 1: they may never sell and the prospect that as public 590 00:34:12,280 --> 00:34:17,240 Speaker 1: companies they're also financial engines and therefore can turn debt. 591 00:34:18,000 --> 00:34:20,160 Speaker 1: You know, they can print their own money in the 592 00:34:20,239 --> 00:34:22,919 Speaker 1: form of stock, they can print dollars in the form 593 00:34:23,000 --> 00:34:29,320 Speaker 1: of debt, and by mining equipment hoard bitcoin. It it 594 00:34:29,480 --> 00:34:33,800 Speaker 1: does bring this whole new dynamic to the bitcoin market. 595 00:34:34,560 --> 00:34:39,040 Speaker 1: UM where it's we're institutionalizing this idea of courting bitcoin 596 00:34:39,760 --> 00:34:44,480 Speaker 1: and storing it as digital energy and um it's it's 597 00:34:44,520 --> 00:34:48,239 Speaker 1: a very exciting time. And the four year cycle is 598 00:34:48,320 --> 00:34:50,440 Speaker 1: that doesn't mean that we're not going to have bowl markets. 599 00:34:50,480 --> 00:34:54,320 Speaker 1: It just means that the nature of bitcoins price is 600 00:34:54,400 --> 00:34:56,719 Speaker 1: going to it's not going to be the same as 601 00:34:58,360 --> 00:35:01,080 Speaker 1: ever again, it's going to be some thing different. It 602 00:35:01,200 --> 00:35:03,759 Speaker 1: might have been accelerated from four to three years, like 603 00:35:03,920 --> 00:35:06,880 Speaker 1: you said, like three and a quarter years, because we 604 00:35:07,000 --> 00:35:12,160 Speaker 1: had that draw down pretty early on in and um, 605 00:35:12,280 --> 00:35:14,760 Speaker 1: we'll see how it behaves, you know, in the next having. 606 00:35:15,560 --> 00:35:18,240 Speaker 1: And uh, you know that's why we're here watching bitcoin 607 00:35:18,320 --> 00:35:21,480 Speaker 1: every day. Yeah, Michael Sailor's I think it was Michael 608 00:35:21,480 --> 00:35:26,880 Speaker 1: Taylor said all your models are broken, like every everything's changed, right, 609 00:35:27,120 --> 00:35:29,480 Speaker 1: And uh, I love that. I constantly say that the 610 00:35:29,520 --> 00:35:31,120 Speaker 1: world we're going into is not the same as the 611 00:35:31,160 --> 00:35:34,239 Speaker 1: world that we're that that we've left behind. Um, you know, 612 00:35:34,320 --> 00:35:36,200 Speaker 1: we're we're in a in a different market cycle. We 613 00:35:36,280 --> 00:35:39,760 Speaker 1: have the FED you know, driving policy, and um, different 614 00:35:39,800 --> 00:35:41,719 Speaker 1: different stores of value like bitcoin coming out, and so 615 00:35:42,160 --> 00:35:45,359 Speaker 1: anybody who's using you know, fifty sixty eight year old 616 00:35:45,440 --> 00:35:47,279 Speaker 1: history to try to kind of project where we're going 617 00:35:47,440 --> 00:35:50,239 Speaker 1: it's different and same with bitcoin, right, I mean, it's 618 00:35:50,280 --> 00:35:52,920 Speaker 1: too new and things are changing too fast to constantly say, well, 619 00:35:52,960 --> 00:35:56,239 Speaker 1: it's going to happen exactly the same way. Um. I 620 00:35:56,400 --> 00:35:58,440 Speaker 1: was just before the secondment, before you came on I 621 00:35:58,520 --> 00:36:00,360 Speaker 1: was reading an article of Goldman Sachs him out and 622 00:36:00,440 --> 00:36:03,239 Speaker 1: said that they expect gold to continue to steal the 623 00:36:03,360 --> 00:36:06,839 Speaker 1: store of value portion from gold, and they think over 624 00:36:06,880 --> 00:36:09,560 Speaker 1: the next five years you can capture fifty of the 625 00:36:09,640 --> 00:36:11,799 Speaker 1: store value that gold has, and they put it up 626 00:36:11,800 --> 00:36:14,520 Speaker 1: to a hundred thousand dollars in five years, which I 627 00:36:14,600 --> 00:36:17,359 Speaker 1: think is very low in my opinion. But I don't 628 00:36:17,360 --> 00:36:19,160 Speaker 1: have a crystal ball, so I'm not trying to put 629 00:36:19,160 --> 00:36:22,040 Speaker 1: any predictions out there. Um, do you have any predictions? 630 00:36:23,800 --> 00:36:26,520 Speaker 1: Real quick? Before we got to wrap it up. I 631 00:36:26,640 --> 00:36:30,719 Speaker 1: think bitcoin is headed to a million dollars over a 632 00:36:30,840 --> 00:36:34,279 Speaker 1: decade decade time horizon, and that that's the way that 633 00:36:34,400 --> 00:36:37,600 Speaker 1: I think about it. So hundred thousand is in the cards. 634 00:36:37,719 --> 00:36:39,759 Speaker 1: So is half a million, So is a million. It's 635 00:36:39,800 --> 00:36:42,279 Speaker 1: just it's a matter of time, and it's just going 636 00:36:42,320 --> 00:36:44,960 Speaker 1: to take a long time. Got it, Got it all right? 637 00:36:45,040 --> 00:36:47,000 Speaker 1: I think a million in ten years is good too. 638 00:36:47,360 --> 00:36:49,600 Speaker 1: I'm in the studio with Nick Bodia at time Value 639 00:36:49,680 --> 00:36:53,959 Speaker 1: of BTC. Check out his newsletter Bitcoin The Bitcoin Layer 640 00:36:54,000 --> 00:36:57,000 Speaker 1: on sub stack, his book Layered Money. Thanks for listening 641 00:36:57,000 --> 00:36:59,040 Speaker 1: to the Mark Moss Show. Catch you next time.