WEBVTT - The Mark Moss Show Jan 14, 2022 0:00:00.160 --> 0:00:03.279 All right, welcome back to another episode of the Markmas 0:00:03.400 --> 0:00:07.160 Show where we are talking about bitcoin, We're talking about cryptocurrencies, 0:00:07.160 --> 0:00:09.680 we are talking about the decentralized revolution, each and every 0:00:09.720 --> 0:00:13.280 week bringing you the latest news, the education and some 0:00:13.320 --> 0:00:15.800 of the biggest, brightest guests in the space, so you 0:00:15.840 --> 0:00:19.079 can have all the information that you need in order 0:00:19.120 --> 0:00:23.640 to be prepared. Now, Uh, things happen fast. Sometimes things 0:00:23.680 --> 0:00:26.759 happen fast, sometimes things happens slow. But uh, right now, 0:00:26.880 --> 0:00:28.960 we have seen a lot of things, and unfortunately the 0:00:29.000 --> 0:00:31.800 price of bitcoin is a little bit down. Um, it's 0:00:31.840 --> 0:00:33.760 off its peak. It was as high as sixty nine 0:00:33.760 --> 0:00:36.400 thou dollars and sitting and sitting now trying to kind 0:00:36.400 --> 0:00:39.879 of recoil and grab some energy in the fifty thousand 0:00:40.080 --> 0:00:43.040 ish range as we speak right now. But don't fret, 0:00:43.080 --> 0:00:45.239 don't fret, just a little break. I mean, we were 0:00:45.280 --> 0:00:48.360 literally a year ago at thirty thousand, and today we're 0:00:48.360 --> 0:00:51.720 consolidating around fifty thousand, which seems like a pretty good 0:00:51.720 --> 0:00:53.760 increase to me. To go from thirties thousand to fifty 0:00:53.800 --> 0:00:56.480 thousand in a year, I'll take it. It's better than 0:00:56.520 --> 0:00:58.840 any other markets have done. Now did go up aside 0:00:58.880 --> 0:01:01.640 sixty nine thousand, and it's down own. But you're focusing 0:01:01.680 --> 0:01:03.160 on the wrong thing. Are you a are you a 0:01:03.200 --> 0:01:05.720 glass half full or a glass half empty kind of person? Right? 0:01:05.959 --> 0:01:09.080 So think about that. Um. Now, if you need any 0:01:09.200 --> 0:01:11.920 bid hope, let me just give you a piece of 0:01:11.959 --> 0:01:13.440 news that broke this week and then we're going to 0:01:13.560 --> 0:01:15.920 dive into something that I'm gonna have one of my 0:01:15.920 --> 0:01:20.760 good friends, Nick bodia On, he's a USC adjunct professor, 0:01:21.400 --> 0:01:26.440 and he wrote something that says, the price is truth, 0:01:26.880 --> 0:01:30.160 the price is always the truth. Now, well, if you 0:01:30.200 --> 0:01:32.120 don't like the price where it's at today, maybe you 0:01:32.120 --> 0:01:34.080 don't like the truth, but let's talk about where the 0:01:34.120 --> 0:01:38.800 price could potentially go. So, um, If you, you know, 0:01:38.880 --> 0:01:41.520 pay attention to money at all, chances are you probably 0:01:41.520 --> 0:01:43.960 heard of Goldman Sacks, Golden raise your hand. If you 0:01:44.000 --> 0:01:45.520 heard of Golden sac well, I can't see you raising 0:01:45.520 --> 0:01:48.800 your hands though, never mind, but Goldman Sacks. Unless you've 0:01:48.800 --> 0:01:50.800 been living under rock, you know who Goldman Sacks are. 0:01:50.800 --> 0:01:54.880 They are the UH financial affirment in the United States 0:01:54.880 --> 0:01:57.600 and really in the world. You've either worked at Goldman 0:01:57.600 --> 0:01:59.000 Sachs and then the government and the government and the 0:01:59.000 --> 0:02:00.800 Golden Sacks in your base of the same and uh, 0:02:01.040 --> 0:02:02.520 you basically kind of run the world at this point. 0:02:02.600 --> 0:02:05.280 Let's just kind of saying like that. Goldman Sacks came 0:02:05.320 --> 0:02:07.920 out with an article this week just the other day 0:02:08.880 --> 0:02:13.760 that said, despite bitcoin's ebbs and flows, they believe bitcoin 0:02:13.800 --> 0:02:19.359 could reach a hundred thousand dollars Wow. As it's as 0:02:19.360 --> 0:02:22.040 they say, it's steadily pushing out gold's place in the 0:02:22.240 --> 0:02:27.400 store of value market. Mm hmm. They said. After topping 0:02:27.440 --> 0:02:32.000 out nearly at seventy November, then bitcoin decided to decline. 0:02:32.040 --> 0:02:36.760 As we talked about that, but bitcoin's Goldman Sacks puts 0:02:36.800 --> 0:02:41.080 bitcoins float adjusted market capitalization at just below seven hundred 0:02:41.120 --> 0:02:45.520 billion store of value market assets that gain or stay 0:02:45.520 --> 0:02:48.480 stable over time. Gold is presently at two point six trillions. 0:02:48.520 --> 0:02:51.480 So what they're saying is that, um, the gold market 0:02:51.600 --> 0:02:54.919 is really it's it's a lot more than that. Um. 0:02:54.919 --> 0:02:57.200 But but they're talking about the percentage of gold that 0:02:57.520 --> 0:03:01.160 people use. And typically people would move to gold to 0:03:01.600 --> 0:03:05.280 what I call a chaos hedge. So whenever there's chaos 0:03:05.320 --> 0:03:08.600 in the markets, whether there's massive inflation, deflation, or whatever 0:03:08.639 --> 0:03:11.280 type of chaos is going on, then people would turn 0:03:11.360 --> 0:03:16.480 to gold. Historically. What they're saying is Goldman Sachs, not me, 0:03:17.120 --> 0:03:20.799 although I agree what Goldman Sachs is saying that they 0:03:20.800 --> 0:03:25.120 are seeing bitcoin taking up that store of value market 0:03:25.200 --> 0:03:28.960 that retail would typically go to UM and now it's 0:03:29.120 --> 0:03:33.120 going into bitcoin. UM. They say that it's about you know, 0:03:33.280 --> 0:03:35.920 the percentage of people, the percents of of the market 0:03:35.960 --> 0:03:37.800 gap that people would go to for the store value 0:03:37.800 --> 0:03:41.440 markets about two point six trillion and uh. They said 0:03:41.480 --> 0:03:43.560 that in the next five years bitcoin making up as 0:03:43.640 --> 0:03:47.360 much as fifty percent of the entire store of value market. 0:03:47.760 --> 0:03:51.360 So right now, UM, the amount of bitcoin or the 0:03:51.360 --> 0:03:53.280 bitcoin is being used as a store value. What does 0:03:53.280 --> 0:03:55.960 that mean store of value? Well, when I earned my money, 0:03:57.160 --> 0:04:00.440 I'm storing my energy to be used at another point 0:04:00.480 --> 0:04:03.600 in time. So, for example, to break this down to 0:04:03.640 --> 0:04:06.160 kind of the first principles level, if I was saying 0:04:06.200 --> 0:04:10.960 digging a hole and I'm expending so I I consume calories, 0:04:11.000 --> 0:04:13.600 I eat food, that's calories. Those calories are energy in 0:04:13.640 --> 0:04:16.400 my body. I expend those calories that energy by digging 0:04:16.400 --> 0:04:17.720 a hole. Let's say I have to dig a hole 0:04:17.760 --> 0:04:19.839 for four hours in a day to earn enough to 0:04:19.920 --> 0:04:21.800 give me my food and shelter that I need to survive. 0:04:22.640 --> 0:04:24.200 But let's say that then I decided to work an 0:04:24.240 --> 0:04:27.159 extra four hours. Well, i've worked an extra four hours, 0:04:27.160 --> 0:04:28.840 expend an extra four hours of energy. Now I need 0:04:28.839 --> 0:04:30.920 to be able to store that energy in a way 0:04:30.920 --> 0:04:32.359 that I could use at a later in time. So 0:04:32.360 --> 0:04:34.040 now I could use that energy for tomorrow and I 0:04:34.040 --> 0:04:37.320 don't have to work all right, So I'm storing my wealth, 0:04:37.320 --> 0:04:39.960 storing my energy, storing my value to be used at 0:04:39.960 --> 0:04:42.960 a later in time. Now, typically people do that with money. 0:04:43.080 --> 0:04:45.480 So you earn money, you don't spend all your money. 0:04:45.520 --> 0:04:49.280 You store some of it. But money currency dollars are 0:04:49.440 --> 0:04:52.359 the worst. Are a horrible store of It's a horrible 0:04:52.360 --> 0:04:54.520 place to store your value because that that value leaks, 0:04:54.960 --> 0:04:58.440 It loses value very quickly. And so most people realize this, 0:04:58.440 --> 0:05:00.720 which is why they're scrambling to buy anything they can 0:05:00.760 --> 0:05:04.800 as fast as they can, including homes, including cars, including stocks, 0:05:04.839 --> 0:05:08.680 including bitcoin, or mountain bikes or kayaks or whatever it 0:05:08.800 --> 0:05:10.920 else is that you want to buy. Toilet paper, Some 0:05:11.000 --> 0:05:14.159 people are stocking up on toilet paper. So what they're 0:05:14.160 --> 0:05:17.200 saying is the store of value market typically historically has 0:05:17.240 --> 0:05:20.680 been gold, but now bitcoin is overtaking that, and they 0:05:20.720 --> 0:05:24.000 believe that over the next five years that store of 0:05:24.120 --> 0:05:27.600 value market that gold is you know, pretty much dominated, 0:05:28.160 --> 0:05:30.960 is going to be UM. More people are moving to bitcoin, 0:05:31.000 --> 0:05:32.720 and they think over the next five years, as much 0:05:32.760 --> 0:05:34.960 as fifty percent of the store of value market would 0:05:35.000 --> 0:05:36.440 go into that, and they would put the value of 0:05:36.440 --> 0:05:39.520 bitcoin at around a hundred thousand dollars on an annual 0:05:39.600 --> 0:05:46.000 return of about that's pretty damn good. I'll take a return, 0:05:47.560 --> 0:05:50.200 especially when you have averaged out over over that time, 0:05:50.800 --> 0:05:53.599 especially when you look at gold, which has dropped three 0:05:53.640 --> 0:05:58.159 point six percent in UM as part of the biggest 0:05:58.160 --> 0:06:03.480 annual decline since heen. So while gold has dropped three 0:06:03.480 --> 0:06:07.000 point six p during one of the most chaotic periods 0:06:07.120 --> 0:06:09.600 in history, UM one of the highest. As a matter 0:06:09.600 --> 0:06:12.359 of fact, we hit the highest inflation level that we've 0:06:12.400 --> 0:06:16.600 seen in forty years, in four decades the most inflation, 0:06:16.760 --> 0:06:22.760 and gold lost value. So it's not hard to understand 0:06:22.760 --> 0:06:26.200 why people would rather store their value in something else. 0:06:27.000 --> 0:06:28.720 They want to say that golden crypto. When you start 0:06:28.720 --> 0:06:33.040 to think about them, there's a lot of the same attributes. UM. 0:06:33.160 --> 0:06:36.880 You said that there's a finite supply, there's only twenty 0:06:36.960 --> 0:06:41.720 one million, they say in this article crypto coins. Uh, 0:06:41.839 --> 0:06:43.760 the only twenty one million crypto coins can be made, 0:06:43.760 --> 0:06:45.440 So you've got this finite supply, just like you do 0:06:45.440 --> 0:06:47.760 with gold. That is not accurate. I'm going to call 0:06:47.800 --> 0:06:50.760 them out. There's a lot more than twenty one million 0:06:50.800 --> 0:06:54.640 crypto coins. There's only twenty one million bit coins. So, 0:06:54.800 --> 0:06:59.080 as I like to say, bitcoin not crypto h I 0:06:59.080 --> 0:07:01.000 said in a previous set, meant that just like gold 0:07:01.000 --> 0:07:03.960 has certain attributes and properties, and there's lots of other 0:07:04.000 --> 0:07:07.520 metals palladium and platinum and silver and rhodium and grow 0:07:07.560 --> 0:07:10.880 molley and steel and aluminum, blah blah blah, um, only 0:07:10.880 --> 0:07:14.760 one has the attributes that gold has. And just like bitcoin, Um, 0:07:14.840 --> 0:07:19.840 there's about, I don't know, fifteen thousand cryptocurrencies, but only 0:07:19.920 --> 0:07:23.440 one has the attributes Open border list permission listens as 0:07:23.480 --> 0:07:26.440 a resistant, immutable, et cetera. And so to his point, 0:07:26.560 --> 0:07:29.360 his finite supply, bitcoin only has twenty one million. Other 0:07:29.360 --> 0:07:32.160 cryptos have more. But that's the same as gold. Right. 0:07:32.200 --> 0:07:35.160 In order for something to hold value, it has to 0:07:35.200 --> 0:07:40.800 be scarce. All the all the basics of economics all 0:07:40.920 --> 0:07:44.080 is based off of scarcity, which, of course we all 0:07:44.080 --> 0:07:46.440 only have twenty four hours in the day, and so 0:07:46.560 --> 0:07:49.080 our time is based off of scarcity, and everything that 0:07:49.080 --> 0:07:51.800 we do in order to push our lives forward is 0:07:51.840 --> 0:07:56.200 based off of that scarcity of time. And there's more 0:07:56.240 --> 0:07:59.480 people than there are resources. Resources are finite, which means 0:07:59.520 --> 0:08:01.360 we have scared city and resources which means that we're 0:08:01.360 --> 0:08:04.000 all competing for more resources. UM. And so when you 0:08:04.040 --> 0:08:06.360 have an unlimited money supply, when they can literally push 0:08:06.360 --> 0:08:08.360 a button on a keyboard and print up trillions of 0:08:08.400 --> 0:08:10.720 more dollars, it messes up this whole system. But that's 0:08:10.720 --> 0:08:13.400 why gold has worked good for five thousand years because 0:08:13.400 --> 0:08:15.840 of a finite supply. Now there is new gold coming 0:08:15.840 --> 0:08:18.360 out of the ground on a regular basis. But Bitcoin 0:08:18.560 --> 0:08:24.040 is programmed to never have more than twenty one million coins. Now, 0:08:24.600 --> 0:08:29.560 some people say, yeah, but can't that be changed UM Theoretically, 0:08:29.920 --> 0:08:33.440 I suppose it could. Theoretically, realistically probably not UM. In 0:08:33.520 --> 0:08:35.480 order to get that changed, it would it would take 0:08:35.960 --> 0:08:39.440 UM basically an attack on the network. It would go 0:08:39.559 --> 0:08:43.440 through probably a year of battle, and if that happened, 0:08:43.480 --> 0:08:45.280 it would probably destroy the network. But we would know 0:08:45.559 --> 0:08:48.080 well in advance if that was ever going to happen Uh, 0:08:48.120 --> 0:08:49.560 and we'd have plenty of time to figure that out. 0:08:49.600 --> 0:08:55.079 Of course, like I said, that's theoretically realistically probably not um, 0:08:55.120 --> 0:08:57.680 but that's the price. Now. Like I said, we're gonna 0:08:57.679 --> 0:09:01.720 have Nick Body coming on as USC professor and he's 0:09:01.720 --> 0:09:04.160 going to talk to us about the price being truth. 0:09:04.559 --> 0:09:07.200 And then we're gonna talk about um something that I'm 0:09:07.240 --> 0:09:10.240 super interested in, which is is the bitcoin e t 0:09:10.480 --> 0:09:13.199 F and the paper supply of bitcoin going to artificially 0:09:13.200 --> 0:09:15.559 suppress the price of bitcoin something I'm worried about. I'm 0:09:15.559 --> 0:09:18.400 gonna be right back with Nick in just a second, uh, 0:09:18.400 --> 0:09:21.560 talking about prices, truth and what's happening with the bitcoin 0:09:22.000 --> 0:09:24.600 e t F. So don't go away, all right, Welcome back. 0:09:24.600 --> 0:09:26.360 You are listening to the Mark Mo Show, and we 0:09:26.400 --> 0:09:29.960 are talking about bitcoin, and we're talking about this decentralized revolution. 0:09:30.360 --> 0:09:32.719 And I am joined in the studio now by one 0:09:32.720 --> 0:09:35.160 of my good friends, Nick Botia. You can find him 0:09:35.200 --> 0:09:39.439 on Twitter at time Value of BTC that stands for 0:09:39.480 --> 0:09:43.120 Bitcoin time value of BTC and um. Nick is um 0:09:43.120 --> 0:09:45.840 On the author of a book called The Layered Money, 0:09:45.840 --> 0:09:48.120 which is an amazing read. I think, uh was I 0:09:48.160 --> 0:09:49.800 think Preston pistaid it was like one of his top 0:09:49.800 --> 0:09:52.240 books of the year. I think that was. That's pretty amazing. 0:09:52.240 --> 0:09:53.800 He reads like hundreds of books a year, So a 0:09:53.800 --> 0:09:56.319 good job on that, Nick. Um. And Nick, you're also 0:09:56.440 --> 0:10:00.200 a adjunct professor I think of economics at US see 0:10:00.200 --> 0:10:03.920 is that right? That's right at USC Marshall School of Business. Yeah, 0:10:03.960 --> 0:10:07.880 so you are somebody very credential to talk about this. 0:10:07.920 --> 0:10:10.000 So thanks for joining me today. Nick. Of course, good 0:10:10.000 --> 0:10:12.120 to be with you. Mark. So, Um, something I want 0:10:12.160 --> 0:10:15.880 to talk about, I know you talk about price is truth. 0:10:16.600 --> 0:10:20.680 There's all the price takes into consideration, all of the 0:10:20.760 --> 0:10:26.079 data that's out there. And something that I've been concerned 0:10:26.080 --> 0:10:27.920 with for a couple of years is these et f 0:10:27.960 --> 0:10:30.840 s coming into the market. Um. Caitlyn Long has been 0:10:30.880 --> 0:10:33.600 talking about this, and Um, you have a little bit 0:10:33.640 --> 0:10:36.199 of a country and view to this. Now. My fear 0:10:36.280 --> 0:10:38.480 with this with this bitcoin market is I believe that 0:10:39.320 --> 0:10:42.200 maybe it's too simple, but price moves off supply and demand. 0:10:42.920 --> 0:10:46.760 So uh, if there's more some you know whatever, more 0:10:46.840 --> 0:10:48.920 demand and lets than supply, then the price goes up. 0:10:49.120 --> 0:10:50.840 And so if I was an institution or hedge fund 0:10:50.840 --> 0:10:52.760 and I want to put a billion dollars into bitcoin, 0:10:52.840 --> 0:10:54.800 I have to buy a billion dollars, take a billion 0:10:54.800 --> 0:10:58.160 dollars off the market. I take supply off the market. 0:10:58.200 --> 0:11:00.560 I'm putting demand into the market. The prices should rise. 0:11:00.920 --> 0:11:03.080 But if there's a paper market for e t f 0:11:03.120 --> 0:11:05.840 s like we have now, there's no it's all it's 0:11:05.880 --> 0:11:08.920 all uh spot right, there's or there's no it's there's 0:11:08.920 --> 0:11:12.120 no cash settled. I'm sorry, it's cash not physically settled. 0:11:12.480 --> 0:11:15.360 So all I'm doing is betting on the price of bitcoin. 0:11:15.400 --> 0:11:18.080 I'm not actually buying bitcoin the way I understand it. 0:11:18.280 --> 0:11:19.960 And so that means instead of putting my billion dollars 0:11:20.000 --> 0:11:22.120 and taking a billion dollars a bitcoin off the market 0:11:22.160 --> 0:11:24.559 and and messing with the supplied tomand metrics, now I 0:11:24.600 --> 0:11:27.680 can just put a billion dollars betting on that and 0:11:27.760 --> 0:11:32.320 it artificially, um, it gives them artificial bitcoin. It doesn't 0:11:32.360 --> 0:11:36.200 affect the supplied demand metrics. But you don't necessarily agree 0:11:36.240 --> 0:11:39.360 with that. Give us your take on that. So yeah, 0:11:39.400 --> 0:11:43.200 I think that bitcoin is very unique in that it 0:11:43.440 --> 0:11:48.200 trades across all these exchanges around the world. Now, we 0:11:48.200 --> 0:11:51.560 we do have paper products, derivative products, et F products 0:11:51.840 --> 0:11:55.560 call it, you know, let's call them all paper products. Okay, uh, 0:11:55.600 --> 0:12:02.280 these are bitcoin substitutes, not bitcoin, right. Bitcoin itself trades 0:12:02.400 --> 0:12:07.520 on coin based pro bitfin x, cracking, all these exchanges 0:12:07.559 --> 0:12:13.960 around the world, and these exchanges, these large, reputable exchanges, 0:12:14.280 --> 0:12:21.120 have longstanding reputations of being able to satisfy withdrawals no 0:12:21.160 --> 0:12:26.480 matter what the sizes, and for that reason, the price 0:12:26.600 --> 0:12:31.120 that we see on those exchanges is the real bitcoin price. 0:12:33.320 --> 0:12:38.720 The fact that ETFs and futures all trade, and even 0:12:38.760 --> 0:12:44.080 bitcoin futures on exchanges like Finance, all those prices trade 0:12:44.679 --> 0:12:48.280 along with let's say, the coin base and cracking price. 0:12:49.679 --> 0:12:54.800 That means that the market of bitcoin is efficient across 0:12:55.400 --> 0:12:59.920 multitude of platforms. You can have small arbitrage and people 0:13:00.080 --> 0:13:04.640 and they're all there are strategies that are dedicated to 0:13:04.760 --> 0:13:09.160 arbitraging the price just between exchanges, because you can, you know, 0:13:09.320 --> 0:13:13.640 find ten dollar differences and go long and short and 0:13:14.000 --> 0:13:17.720 arbitrage that trade. But the fact that these large bitcoin 0:13:17.800 --> 0:13:24.400 exchanges have satisfied withdrawals for years and years means that 0:13:24.520 --> 0:13:30.920 those prices are the real bitcoin price. And whatever. You know, 0:13:31.880 --> 0:13:33.960 and I respect Caitlin a lot, and she's a friend. 0:13:34.880 --> 0:13:36.679 What what she's saying is that they are all these 0:13:36.760 --> 0:13:41.239 paper products, and you can have you know, unlimited, theoretically 0:13:41.320 --> 0:13:46.560 unlimited leverage to short bitcoin through these paper products. While 0:13:46.600 --> 0:13:49.920 I believe that, you know, that is in theory possible, 0:13:50.880 --> 0:13:53.880 it doesn't mean that what the price that we observe 0:13:54.040 --> 0:13:56.480 is not the real price. And that's what we're saying 0:13:56.520 --> 0:14:00.400 when price is truth here. The price does actor in 0:14:00.679 --> 0:14:03.800 everything that we know about bitcoin, including that there are 0:14:03.880 --> 0:14:09.000 paper products and people can go naked short through derivatives 0:14:10.360 --> 0:14:13.679 that aren't you know, backed by any real bitcoin. But 0:14:14.080 --> 0:14:18.360 you know, on the exchanges, if people withdraw and the 0:14:18.600 --> 0:14:21.360 bitcoin is there at the price that's given to them 0:14:21.440 --> 0:14:25.920 on the screen, then that's what the bitcoin prices. Okay, 0:14:26.000 --> 0:14:28.720 So it sounds like maybe there's two different conversations going 0:14:28.800 --> 0:14:34.200 on here. So you're saying that whatever, whatever is happening 0:14:34.400 --> 0:14:37.280 through all these exchanges and paper markets, etcetera, etcetera, etcetera, 0:14:37.560 --> 0:14:41.080 the price is the truth. The price summarizes everything that's 0:14:41.080 --> 0:14:44.320 going on out there, which which obviously is obvious. Yes, 0:14:44.440 --> 0:14:46.600 that is the truth. And I get that. I think 0:14:46.680 --> 0:14:48.480 what she's saying, and not to put words in her 0:14:48.480 --> 0:14:51.120 mouth where I guess I'll say what what I have 0:14:51.320 --> 0:14:55.560 a concern of is, while the price maybe truth and 0:14:55.920 --> 0:14:57.800 actually I say the price is truth, I agree with 0:14:57.880 --> 0:15:00.520 you on that, that doesn't mean that the price isn't 0:15:00.520 --> 0:15:03.480 suppressed being the truth. So the price is the truth, 0:15:03.760 --> 0:15:06.920 but but the but the price could be manipulated because 0:15:07.960 --> 0:15:11.840 now we've inflated the supply through fake paper market. So 0:15:11.920 --> 0:15:14.040 even though the price is the truth, couldn't it still 0:15:14.160 --> 0:15:20.880 be artificially suppressed? Of course, And you know that's the 0:15:20.960 --> 0:15:23.680 other side of it is I'm not even arguing that 0:15:23.800 --> 0:15:26.040 it can't be suppressed or that you know, it could 0:15:26.080 --> 0:15:29.239 be higher if it wasn't wasn't absent for these instruments. 0:15:30.000 --> 0:15:35.360 But that's not something that we can do anything about. 0:15:35.760 --> 0:15:41.640 It's not something that we can change. Um, the financial 0:15:41.760 --> 0:15:45.440 powers that be if that's their strategy to suppress the 0:15:45.480 --> 0:15:49.000 price of bitcoin, or some you know, large whale trader 0:15:49.720 --> 0:15:52.000 that's their strategy to suppress the price of bitcoin over 0:15:52.080 --> 0:15:55.120 the long term, it's not something that we can change. 0:15:55.360 --> 0:15:59.480 And um, it's not I think, you know, we get 0:15:59.520 --> 0:16:03.440 a lot of background in contact from this from the 0:16:03.480 --> 0:16:09.080 gold price suppression scheme and the London bullion trade and 0:16:09.400 --> 0:16:13.600 and how that's worked over the last several decades and 0:16:13.680 --> 0:16:16.960 that does energize some of this conversation. So I do 0:16:17.200 --> 0:16:21.960 want to acknowledge the work done by data and the 0:16:22.120 --> 0:16:26.280 discoveries that were made in how paper markets are used 0:16:26.360 --> 0:16:30.560 to suppress the gold price and have been for years, um, 0:16:31.040 --> 0:16:35.880 but gold has also risen in price despite that, Gold 0:16:36.000 --> 0:16:40.560 has taken a geopolitical you know, importance in the last 0:16:40.920 --> 0:16:44.520 fifteen years since the oh seven or eight financial prices 0:16:44.920 --> 0:16:50.520 because of that. Russia China are you know, making huge 0:16:51.080 --> 0:16:56.840 geopolitical moves because of gold still despite whatever London price 0:16:56.880 --> 0:17:02.120 suppression scheme is going on, and so bitcoin will also 0:17:02.320 --> 0:17:05.159 charge on in the face. I just my point is 0:17:05.200 --> 0:17:08.320 that I'm not really concerned about whether or not the 0:17:08.680 --> 0:17:12.320 bitcoin prices being suppressed to these instruments, because it is 0:17:14.720 --> 0:17:19.920 a market that has a transparent settlement mechanism, very transparent, 0:17:20.080 --> 0:17:23.879 the most transparent of all time. So we should celebrate that, 0:17:24.240 --> 0:17:27.000 and um, you know, it's it's just not a concern 0:17:27.080 --> 0:17:29.919 to me. Okay, I want to I want to dig 0:17:30.000 --> 0:17:31.879 into a couple of those things that you talked about 0:17:31.920 --> 0:17:34.120 there that I think are a couple of good points. 0:17:34.160 --> 0:17:36.280 The questions that I have while talking about that you're 0:17:36.280 --> 0:17:39.040 listening to the Mark MOA show. We're talking about bitcoin 0:17:39.119 --> 0:17:42.080 and the decentralized revolution. I'm in the studio with Nick 0:17:42.119 --> 0:17:44.080 body up Um. You can find them on Twitter at 0:17:44.160 --> 0:17:48.639 time Value of btc. We're talking about bitcoin, the prices truth. 0:17:48.760 --> 0:17:51.800 We're talking about this this new E t F paper 0:17:51.920 --> 0:17:55.640 market and the possibility of its suppressing the price. We're 0:17:55.640 --> 0:17:58.680 gonna dig into more about that and some of the risks, UM. 0:17:58.800 --> 0:18:01.040 So don't go away. We were back, all right, welcome back. 0:18:01.080 --> 0:18:03.560 You're listening to the Markma Show. We're talking about bitcoin, 0:18:03.680 --> 0:18:06.320 and we're talking about this decentralized revolution, and today we're 0:18:06.359 --> 0:18:09.280 digging into a little bit deeper into the inner workings 0:18:09.320 --> 0:18:12.159 of this financial system. I'm in the studio with Nick Bodia. 0:18:12.240 --> 0:18:14.639 You can find them on Twitter at time Value of 0:18:15.040 --> 0:18:19.040 btc um. He also writes a newsletter. He's an adjunct 0:18:19.160 --> 0:18:22.640 professor at usc UM and he also writes a newsletter 0:18:22.680 --> 0:18:24.560 that I've been reading and if you're interested in these topics, 0:18:24.680 --> 0:18:26.720 you should subscribe Nick. What's the name of that newsletter. 0:18:28.000 --> 0:18:31.000 It's called the Bitcoin Layer on sub Stack, The Bitcoin 0:18:31.080 --> 0:18:32.840 Layer on sub Stack. I recommend each of you to 0:18:32.880 --> 0:18:35.919 go out and subscribe to that. It's so much information Uh, 0:18:36.320 --> 0:18:38.240 it's too cheap. Nick. I'm talking to you about that later. 0:18:38.280 --> 0:18:40.560 But anyway, UM, back to what we were talking about, 0:18:40.640 --> 0:18:43.720 which is, um, you know, the price being truth and 0:18:43.880 --> 0:18:47.000 the e t F market. Now to your point, Um, 0:18:47.040 --> 0:18:48.720 you you went in and kind of talked about the 0:18:48.760 --> 0:18:51.879 gold market, and you know, in the gold market, Uh, 0:18:53.200 --> 0:18:56.719 you know, estimates are there's potentially five hundred paper ounces 0:18:56.840 --> 0:19:00.399 for everyone physical ounce that's being traded. Um. You know, 0:19:00.760 --> 0:19:05.040 massive manipulation with naked spoofing and naked shorting and things 0:19:05.080 --> 0:19:06.879 like that. You know, we've seen JP Morgan to pay 0:19:06.920 --> 0:19:09.960 out massive fines for things like that. Um, And so 0:19:10.400 --> 0:19:12.560 you know there's no doubt that that's that's being done. Now, 0:19:13.119 --> 0:19:16.200 I get that with bitcoin that even if you manipulate 0:19:16.320 --> 0:19:18.800 the price, it doesn't affect the network. It's still borderless, 0:19:18.800 --> 0:19:22.080 permission list, censorship, resisting, immutable, blah blah blah. Um. But 0:19:22.320 --> 0:19:25.080 I would, in my opinion, maybe one of the greatest 0:19:25.440 --> 0:19:29.440 risks to bitcoin isn't that Probably the two biggest risk 0:19:29.520 --> 0:19:31.960 in my opinion are one that the nodes will become 0:19:32.000 --> 0:19:34.639 centralized if people don't run nodes, and then you know, 0:19:34.720 --> 0:19:37.080 coin bases and exchanges get too much power that's that's 0:19:37.080 --> 0:19:39.399 probably one. But the second one is that the price 0:19:39.480 --> 0:19:42.359 could be so artificially manipulated that people would lose interest 0:19:42.680 --> 0:19:44.959 and then countries, let like take take action like Al 0:19:44.960 --> 0:19:47.760 Savador for example, If the price gets dropped in half 0:19:47.800 --> 0:19:49.359 when they've put their whole money into it, other countries 0:19:49.440 --> 0:19:51.600 gonna follow suit. So I think there is a risk 0:19:51.720 --> 0:19:55.720 there in my opinion. And so I see this possibility 0:19:55.800 --> 0:19:59.800 to manipulate the supply demand, manipulate the price could have 0:20:00.000 --> 0:20:01.600 of an effect. And I know you said it kind 0:20:01.640 --> 0:20:06.119 of is what it is, um, but I guess it 0:20:06.240 --> 0:20:07.840 is what is. But do you see that as being 0:20:07.880 --> 0:20:09.280 a risk? I mean, do you see that if they 0:20:09.400 --> 0:20:12.080 build up this paper market enough that they could that 0:20:12.160 --> 0:20:14.840 they could use that to artificially suppress the price over 0:20:14.920 --> 0:20:19.280 long term. So another aspect of the whole prices truth 0:20:19.320 --> 0:20:23.560 thing is that, uh, the price tells a story through time. 0:20:23.920 --> 0:20:28.320 So I look at I used price charts to tell 0:20:28.400 --> 0:20:31.200 me what's happening through time, and I look at Bitcoin's 0:20:31.240 --> 0:20:35.120 price chart, and I'd like to use realized value as 0:20:35.840 --> 0:20:39.600 realized market cap as one of my metrics that anchors 0:20:40.440 --> 0:20:44.080 how I'm looking at the price and the realized you know, 0:20:44.200 --> 0:20:47.600 realized value of bitcoin is um in the thirties, right, 0:20:47.840 --> 0:20:51.520 that's what that's the the m v r V. Yeah, 0:20:51.680 --> 0:20:54.240 so that's the ratio between the market value and the 0:20:54.320 --> 0:20:57.000 realized value. So right now we're you know, at about 0:20:57.080 --> 0:21:00.359 one and a half. And what that means means is 0:21:00.440 --> 0:21:03.920 that word about you know, premium to what the realized 0:21:04.040 --> 0:21:09.720 value is. The realized value is a snapshot of where 0:21:10.080 --> 0:21:15.240 the bitcoin price was when bitcoin transaction transacted on the 0:21:15.359 --> 0:21:20.440 chain itself, not necessarily on exchanges, and so it is 0:21:20.560 --> 0:21:26.960 a slower moving um target of what bitcoins let's say 0:21:27.000 --> 0:21:30.480 fair value. I don't explicitly want to call it a 0:21:30.560 --> 0:21:34.760 fairy value, but it is a valuation metric. Realized price 0:21:34.960 --> 0:21:39.160 is a valuation metric that we can use to think 0:21:39.240 --> 0:21:42.200 about bitcoin over a longer time horizon. Just like we 0:21:42.600 --> 0:21:47.399 use two hundred day or fifty week moving averages to 0:21:48.080 --> 0:21:51.119 smooth price through time, realized values a way to do that. 0:21:51.480 --> 0:21:55.200 So weird about one and a half times realized value today. 0:21:55.520 --> 0:21:59.840 So and for much of two thousand and twenty one, 0:22:00.560 --> 0:22:05.159 we've been approaching or touching up against these levels that 0:22:05.280 --> 0:22:10.080 are three plus, so a very extended valuation. When you 0:22:10.119 --> 0:22:13.080 start to get to you know, quote unquote bubble territory 0:22:13.200 --> 0:22:17.000 for for for bitcoin. So in the last twelve months, 0:22:17.119 --> 0:22:20.040 what can we observe from the price we've we we 0:22:20.160 --> 0:22:23.200 observed that the price has gotten very hot at times 0:22:23.760 --> 0:22:26.160 and has cooled off to a point where it's still 0:22:26.840 --> 0:22:31.520 above this long term fundamental metric. So where's the price suppression? 0:22:31.920 --> 0:22:35.200 Let's be honest, it's not. To me, I don't observe it. 0:22:36.960 --> 0:22:40.960 You could say if the ratio of market value to 0:22:41.040 --> 0:22:44.040 realize value was less than one for a sustained period 0:22:44.080 --> 0:22:48.440 of time and was exhibiting some random behavior, but it's not. 0:22:48.800 --> 0:22:54.760 Bitcoin has seen huge rallies which are very characteristic of bitcoin, 0:22:55.280 --> 0:22:58.840