[00:00:01] Speaker A: Welcome to Crypto Talk Radio, the podcast for everyday investors like you. Visit us on the
[email protected] and now here's your host, Leister.
[00:00:13] Speaker B: Thank you for that, Bailey. And welcome everybody out there on Crypto Talk radio
[email protected] man, it's hot outside.
Extremely hot. But good news, the air conditioner passed with a clean bill of health after I fixed it myself. That rhymes. Turns out there's a cover. It's like a screen cover to keep bugs and whatnot out of it. Turns out that actually lessens during the heat. It lessens the efficacy, look it up. Of the outdoor unit just slightly to the point that between a perfect storm of extreme heat plus this slight dip in efficiency caused a little bit of heating that caused a trip that caused it to da da da da. So we took that off, measured it fine and it was blazing hot outside. So now I got to watch it, but seems like it's okay. But it's extremely hot outside, folks. Today will be a short episode mostly because I'm hungry and have not had a chance to eat that contractors in it out. But we're going to talk about bitcoin. That's going to be a heavy focus on today's episode. Hopefully you'll enjoy.
Coinmarketcap.com we will zoom out to the month chart for bitcoin since bitcoin is the topic of today's episode. Currently hovering just shy of the $64,000 mark with a slight upward, not strong upward trend and theory. This is only theory. I can't prove it, but theory is that there are a lot of longs out there. They're essentially gambling that bitcoin is going to go higher. I've got another stat that may fascinate you here later, but the theory is that bitcoin is going to go higher but it's going to have a hard time doing so. You may have heard various YouTubers talk about a cycle, that there's a cycle that's built into bitcoin's very framework that causes it to run up, that we expect to run up. The run up is here soon and you've heard soon now for quite few months now. I know. I saw DaVinci, Jeremy.
Geez. It was like every freaking week he was talking about we're almost there, we're almost there, we're almost there. Deep, deep. That's like nine months ago and he's still doing it. And then he switched to silver and then he did. So what I'm getting at is not to denounce the theory that bitcoin should go back up. I'm rather saying that I just find it ironic. It's like so much of that, of just it's gonna go up, it's gonna go up and then there's not really any strong fundamental behind why they say that. It's just what they feel or what they think. And that's fine. You know, you can feel and think what you do. I just, I see not a strong upward trend. I don't see this. We certainly didn't have the cycle. Or if we do have a cycle, it's not the predictable that we thought it was for. Why ever that's the case now? It could be suppression because there's too many people holding bitcoin. Nobody knows exactly what's going on. All I've ever said though is 66,000 was my target at a point, and then it went way lower than that and came back up because it was just going down to like 58,000 bucks. It didn't stay down there. It did for a couple days, but didn't stay like downward trend. It came back up, but the upward trend is not strong enough to offset what seems like it wants to do, which is go down. Some people think that the bottom's in. I, I definitely don't agree with that one. I think the bottom's like somewhere around 30,000 bucks. You're like that. Kids are crazy. I, I don't know, disagree. But if we're honest, a lot of the people that would have been pushing it up don't exist. And we can't really rely on ETFs. I'll get to that here in a second. We have to look at institutional big players. And I'm not talking strategy or micro Saylor. I'm talking to other people.
I don't think clarity acts going to do significant either. I think it's just. I think it's just part of what we expected would happen with bitcoin at some point upward is I would argue this is my theory.
I would argue is inevitable. Simply that the timing is what's in question. The timing that people have been saying didn't make any sense. It was no real. There was fundamentals in terms of analysis, but there wasn't fundamentals in terms of what's the real reason other than this pattern that people call out. Nobody can speak to it because remember, bitcoin doesn't really endemically have a value. It's just a thing that people say is worth X, that's what you have. It's not like silver. Silver is being suppressed, but it has intrinsic value. It's used in various hardware pieces. Gold has intrinsic value. Palladium has intrinsic value. When you have intrinsic value, you can point at the price and understand demand. That demand drives price up, or it should.
Availability helps move price, depending on what's. Which direction you're going.
What does bitcoin have? It doesn't really, other than people's sentiment, people saying it's worth X. That's really all it has. That's fine, but again, we're not in the wall wall. Where's the 2021 where you said a bunch of nerds pushing the price up? Those days are gone. So all you can bank on is widespread adoption. Well, if it gets widestream adoption banks and et cetera, what's that going to really do to the price? It's going to suppress it even further because they wouldn't want like you think they'd want it to pump up. But if it pumps up and then they hit a supply constraint that's hurting their business because they're spending more money to do it. Obviously the government could step in and print more money. So you know, there's a way out. But I don't think that's the world that we want. It's kind of what I'm getting at. So I don't see what everybody else seems to see in terms of this mystical, you know, people talk, million dollars, whatever. I don't see it maybe, but I just don't see it myself. Least I look at it.
Ethereum's trend looks a little bit more impressive, currently hovering just shy of the eighteen hundred dollar mark on the month chart. And then of course it has an upward trend that's a little bit more powerful, largely spurred on by idiot Vidalik and words. He was talking about what he wanted to do, where he was saying, you know, we should, we should slim it down, we should go leaner and meaner and we should da da da. And obviously these are things that he should have been talking about before he took the damn poo for work away, but I digress. Regardless, you know, his words help pump some of this stuff. Now, I don't know how strongly it did or if it made a notable difference in the overall didn't seem like it did. But the upward trend is certainly stronger than what bitcoin's doing, which some people speculated was indicative of the beginning of the altcoin season, that we thought it was cycling off bitcoin and that money's flowing in all coins. That's entirely possible. I just. Based on the trend, I don't think so because we're not significantly higher than we were like at this time in June.
So I don't see that. I don't see it. A consistent sustained pattern up. Just seems like right now there's pressure to go up, but there's a pressure to go down. And the pressure to go down seems to exceed the pressure to go up. Same with bitcoin, just happens to be there's more pressure on the ethereum side and then of course all the other alts would follow suit. At least that's what I see.
Bitcoin mining Right now, of course with the prices of bitcoin in the crapper, bitcoin mining facilities are struggling. I actually had one reach out and following up, I had an inquiry because I was curious about one. They're in the United States. I was curious about their facility and wanted to know a little bit more. And I never heard back. So I said okay, well screw you, right? They just reached out. I disregarded them because they ghosted me before. But you know, I get a sense of desperation. I get a sense that there's simply not that adoption. You got to understand, like if I'm going to pay a monthly rental fee for something, there has to be an roi. The ROI has to be significant. It doesn't have to have dollar amount equivalency, but it has to have enough that I can say, yes, this is going to get you x bitcoin, given that we expect it to go up higher. There are people out there listening to me right now, Crypto Talk fm, who would say, leister, you're nuts. Why don't you just buy the bitcoin? I get what you're saying and there's a logic in what you're saying. It's not that I disagree with what you're saying.
Follow me here.
Buying bitcoin, just on the surface of it, there's an, there's an assumptive cost in terms of tax because you acquired it and because the government has eyes on it. If you mine it, you're acquiring it. But not by way of a purchase. In fact, it's an expense. You spent money by way of electricity or let's say it's cloud by rental fee. That's money you didn't make. Honky talk man wrestler, the old days, wwf, he had a joke about that. It's like if I'm taxed, sometimes tax is good thing. Because it's money you didn't make, right? So if I take and write it off, it's a tax write off business expense. So if I do that under my business, it's a write off because it's not money I made, it's not profit, it's not capital gains. Then you sit on the cryptocurrency with the expectation of price appreciation at some point later. But by that point you're not having to worry about the upfront hit, just buying bitcoin would do, which is what it does. The exchange would have to report it to the tax authority and then you're nailed right up front. Whereas the same cannot be said when you're mining it. That was my thought process and I still have that. So I was looking into mining. Now I think it's a good time to do it because prices are low. Because there should be in theory desperation of the mining facilities where I can get in with a decent rental rate that seem to make sure they're not ripping me off. Again, obviously there's no guarantees, but I need to make sure that the return is substantial. Let's say I was able to get something that's able to mine, you know, a tenth of a bitcoin. I mean that's not bad.
So it's just looking at it, at that perspective of just it's something that sits in the back and then there's a rental fee but it's a write off because it's a rental of a facility, whatever. And then you know, at some point there's enough bitcoin to justify because when it does go up then it's bitcoin that I can cash out. Now obviously the risk is that to make sure that bitcoin comes to a wallet, custody wallet, so it's not stuck in the mining deal. Which means that can't have minimums for withdrawal. So you have to do some due diligence, make sure that they're not locking you up. So they lock you up, it's no better. And if they say, you know, I've had one where it was, you know, it was mining something, was years ago mining something and then it just shut down.
I don't know that really was. But I know I had cashed out a couple of things, I know it was doing something but it didn't sustain these, that's another risk. You could run into something where it looks like it's mining something good and then they disappear and take your stuff with it. So if you're gonna do it, my Point is make sure you get it to your wallet. Make sure their terms don't block you from getting it to your wallet. As long as that's true and as long as the return's decent, I don't see a problem with it, especially right now. Because if Bitcoin does go back up, I mean that's positive, at least in your favor. Keep an eye on the bitcoin mining situation because of course the mining profits is going to. Those facilities can't sustain if they're not able to make enough money because the price of it's crapping.
Those facilities are not going to sustain. If that happens, let's say what happens. Well then you get to difficulty impacts. If there's a difficulty impact, then different technology will just get deployed to try to deal with that. We don't really know how I can deal with the difficulty of things where it can possibly do stuff more efficiently, less there's a lot of unknowns in play. So the mining, I think world with proof of work is going to be intriguing to follow over the next few. And then again, I frankly think Ethereum should not have dropped proof of work. I think that ultimately killed it.
Analysis was done. And this is crypto quant, if you do know crypto quant, but this is crypto quant throwing some numbers that basically implied. He didn't directly say it, but he implied that in order the cycle, we're talking about that in order for the cycle to continue, there's significantly more money than there ever has been needed in order to significantly pump the price of it. And there's a law of diminishing returns concept with the price and where it is. Anybody that was looking at crypto when it was somewhat easy, but not directly easy to purchase it. So you're talking 2010, 2011, 2012 ish timeframe.
It didn't take much, you know, you were talking $3 billion ish to pump the price a significant amount. But that's simply because of fomo, right? People saw that it was going up and then they fomoed into the deal. There was foaming into the deal. And then of course there's a sell off. Then we get to the next cycle. You're talking about 2016 ish cycle.
Now it takes roughly $70 billion in order to cause a run and the run is a fraction of what the prior run was. So you're talking from 3 billion to $70 billion but significantly less of a run then the next cycle, which is the Wawa west period, roughly 20, 20, 2021 ish.
Now you needed three, just shy of half a billion, or excuse me, half a trillion, sorry dollars. And it was a fraction of that. And then now in this current cycle, the estimation, this is where crypto quat freaked people out, was saying just over $700 billion in order to cause what's essentially a minor run up. This flies in the face of everybody talking about a million dollar bitcoin. And it's the reason that so many influencers are all of a sudden talking about buying bitcoin to buy a little bit. But you know, because they're not, they're just trying to look for any sort of price appreciation and they assume that if everybody gets in there it's going to get to that point. Well, again, it's a law of diminishing returns. And it has to do with the amount of money necessary to move price, which is important. The more of the large players that hold bitcoin, the greater the amount of money it's necessary to move its price. Because they're sitting on so damn much. Because they're sitting on so damn much, you would expect a supply crunch that assumes this. The impact of the supply crunch assumes demand. If the demand is not commensurate, look it up.
With the amount of supply being set out there, it's not going to move. You have to have a good balance of both. Way back in 20, let's say 2012, demand far outstripped, far outstripped. And then the price of it was so low it was easy to move the price. The price is low, supply is low, demand is sky high. Largely a FOMO that rhymes. That's what you had. And then that wah wah west period was largely supplanted by the alts, if we're honest. Bitcoin was to a point, but a lot of people were using alts, banking a bunch of money, then flowing it into bitcoin but nowhere near the amount of fomo. Like currently the people that bought a bunch of bitcoin are either sitting on it or sold off of it, don't plan to come back. The people are on the sidelines are waiting for a price dip. So you got this freeze point.
That freeze point is not going to resolve anytime in the short term.
So I'm skeptical about a million dollar bitcoin simply because of how much money it's now taking in order to cause a price run of significance.
What would change that?
What would impact it to where there could be more price movement?
I don't even think it's adoption Mainstream. I don't think that's what would do it. I think the only way, the main way, not only way, the main way to get any sort of strong price appreciation on Bitcoin at this point. The main way to do that is we have to control inflation.
The reason I say that is because we need to control where money flows and why to do that we need to control inflation. If we just print and print and print and print and we're not getting that supply crunch going, what's the reason? What's the justification? What's the logic of buying into Bitcoin knowing it's just going to go down? It's a waste of money, especially because all expenses are going up across the board.
These are my thoughts. Somebody else might emphatically disagree and that's fine. I think until you control inflation, you're not going to see those significant run ups like you might have wanted to anytime in the near future.
The short answer though for bitcoin overall is you got to watch out.
I think everything down is a discount opportunity, but you got to watch out for some of these traps that are happening at points and you can't, they're hard to predict.
Don't get distracted by the strategy. MICHAEL SAYLOR BUSINESS don't get distracted by the banks adopting something. The Russia, the war. These I think are red herrings. Do they have an impact? Yeah, but not to the degree you might think.
I think big picture demand is going to be the hardest thing for bitcoin because again, it doesn't really do anything right. It was sold, sold a bill of goods about what it could be, but it's not been an effective hedge against inflation at all.
Charts talking about you'll need one of a dollar of this, but you need a fraction of a bitcoin. That's, that's felony, it's fake. There's not been a strong logical case for bitcoin or over Fiat. And I said I don't see there would be in the short term if you can't create that catalyst, it's not going to do what it did before because we've not justified why it should anymore. That rhymes. So what are some ideas I might have?
I thought if I were wealthy enough, which I'm not, but if I were wealthy enough, the one thing I would do is I would, first of all I'd manufacture a car that's not butt ugly. Right. So I would create my own car and I would show them how to do it. Right. I'll go back fundamentals. Okay. Not this SUV crap. We need to get styled. It needs to stand out in the crowd. We shouldn't be copying everybody's look and feel. It should be a hybrid, not an ev, you know? And it needs to have a CD player in the shit. Yes, I understand some of the new people don't understand that. But it should have a CD player. There's no reason not to. I don't care about your Bluetooths and your automobile whatsits, but it will have a CD player. Just because it should have a 120 volt outlet in it. Yes, my car has one. I don't see a reason why we shouldn't do that. I don't know why cars didn't standardize on that, to be candid.
I'd like to see more leg room. I'd like to see it sweat. I would create my own car, show them how to do it right.
Then my sales pitch would be, I'll sell you my car, but I want bitcoin. I don't want your Fiat, I want bitcoin.
And I want you to make an offer.
So you offer bitcoin and I'll tell you whether I accept your offer or not.
We're not talking Fiat, we're not talking dollars, we're not talking any of that stuff. We will do a transaction and I will trade you one of my cars for your bitcoin. Your offer just has to make sense. I'll know when it makes sense based on how much bitcoin I want. Let's say somebody walks in and says, I got one bitcoin, I'll give you for the car. Okay, I'll take your offer. Sure.
The next person I might want one bitcoin or I might want less, it doesn't matter. I can then say, now I've put some use towards bitcoin as a transactional conduit with no expectation of the Fiat equivalency, because it's the only way to buy my car. So if I create enough demand for my car, and of course with celebs, that's what you're talking about.
Now what am I doing?
I'm triggering people to acquire bitcoin. So I'm causing a run on supply.
I'm creating something that is effectively a utility, as in, you can only buy my car with bitcoin, period, point blank. I'll cover everything else. I'll cover your stickers, I'll cover your fees, I'll cover everything else, but I want your bitcoin. We do that, then we say you have to go run to get bitcoin. If you don't have it, if you do have it, make me an offer.
Goes to how much bitcoin do I want from people?
And I want you to offer it. I'm not going to give you a price. I don't need to. You offer what you think it's worth. We'll decide together whether your offer is reasonable.
So somebody who is wealthy that likes my car, if there's enough demand, and then I say, there's only X amount ever manufactures thousand. Let's say somebody's going to come in and they're going to say, all right, I'm down to my last one. I want that freaking car.
Now I cause a bidding war.
If I cause a bidding war, at some point I'm going to end up with a lot of bitcoin. Now, let's say I take that bitcoin and I sell some of it to invest back into the business.
If I do that, and I say, all right, now we're going to create another model.
We're going to do the same thing again, offering you bitcoin.
I put demand in it here. I might do a truck or possibly an suv, but it's an alternate type. It's a completely different type of vehicle versus my car.
I might also do a straight hatchback. I might do a coupe. I might do a convertible. I might do a manual, a shift. I create defined, unique brands within this. And I use bitcoin to govern demand.
My job is to simply make it something that people want and they want it so bad, they're willing to go run to get bitcoin and then offer it to me. And then the offer just has to make sense. And at some point, I don't need to get greedy. Let's say bitcoin skyrockets.
If somebody's still willing to offer one bitcoin, cool.
If they're not, they want half, I might be okay with it.
My point is all of that assumes that the car creates demand, that people want it. It's appealing to them. They're willing to get into bitcoin because it's so damn good.
When I say a catalyst, that's what bitcoin lacks. There's nothing like that. There's nothing that drives people, no pun intended, to go and get bitcoin in order to consume it as a form of its own currency. Irrespective of fiat, it doesn't exist. Until it exists, how can you drive strong value out of it? Because it's Emperor's new clothes. It's, it's Price is fake, it's not real.
This doesn't apply for every situation or every person.
I'm simply spitballing. I'm talking my. My truth. My truth is bitcoin is suppressed by a lack of true demand. It's, it's artificial demand.
It's people saying it should be worth something because they see a future that's not realistic, where we don't need fiat because we've already declined the paper dollar. But when you talk electronic money, people are perfectly fine with it. So what does bitcoin do that, that does not, not nothing much.
Nothing much.
It does stuff, but nothing much.
In summary, not trying to sell you away from crypto or bitcoin at all. I'm simply getting you to think what's happening right now, I think is a symptom of an awareness that's long overdue, where people weren't clear, they weren't clear that this is the truth, this is real, this is, this is how it works.
And they needed to be. They needed to understand this is the truth here. And once you get, once you wrap your head around what's really happening, everything gets so much easier. When you're trading because you're not trading worried about the fiat value now. You're trading based on the potential and you're trading smart. You're not dumping more money you can afford to lose because you understand.
Jesus, Price. This has been lasting for a while.
Hopefully you train yourself not to get angry or frustrated or upset like I see some people online. I know it'll still happen. I wish it didn't. But hopefully I'm giving you a different perspective than others are doing. One that's more realistic, one that's more conservative, but one that's more thoughtful, where you can take that information, guide your decision, whatever that may be, without the emotion tied to it, the emotion doesn't really matter. Bitcoin doesn't do anything at the moment. It doesn't mean it's not worth trading. It doesn't mean it's not worth holding it. It simply doesn't do anything at the moment. And without that catalyst, you should not have unrealistic expectations of price appreciation.
Sam.
