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Episode Transcript
[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 in crypto Talk radio [email protected] can you believe that December is already almost over? It's already almost over, over. My name is Leister. I'm your host and welcome, or welcome back.
It's a special episode. I'm pleased and proud of today's episode because it's going to involve information and talked about before and I think it's good and valuable. And I wanted to share thoughts that are a little bit different than the usual. I also have a special request from our triad community, cryptotalkradio. Net slash Discord, if you're curious, triad community members, Geechee is a longtime member of the community, had a request, and we do honor request from our triad community members that we appreciate. And he was asking about follow on coverage that we had done. We had done coverage on various wallets, coverage on exchanges way back yonder. We wanted to revisit, we were waiting a little bit for the bear to kind of pass asking if we could kind of revisit some of the exchanges and some of the wallets. And I think now is a good time for that. So thank you for that Geechy shout out for you and I will do the best I can. This is going to have to be a multi part episode, of course, because especially the exchange coverage that takes a while. So it'll be a multi part episode. I will be doing it, though, and I'm going to target certain of the exchanges because some of them actually are dead that I covered before. But I'll cover some of the exchanges that are still around and what I know about them. I can make a soft recommendation, but I can't tell you what to do with your money. All I can do is tell you what I see. So before we get there, let me get through my coverage of some of these other things that are going on and the numbers. Then we'll crash course through that and have a good time.
Let's talk numbers, shall we? Coindesk.com zoom out to the month chart. And we were on an upward trend, and then that trend didn't last long. And if you're listening to leister [email protected], you are already in the know. You already had the inside scoop. You already had the warning when I told you we were headed probably for some volatility and to be careful. Hopefully you understand I'm not psychic. Some of these things are kind of obvious, though. Sustained runs would never have. It's not going to hold for very long.
It's not logical. There's too much going on. And I said that with all the disruption in the crypto scene, there was going to be some volatility. And this is what you see. It doesn't change my thought that we're right at the beginning of a bull run. It simply means that it's going to be. And I said 2024. I mean, I've been saying that for months. If you're new, this is what you're up against, right? You're up against somebody that's completely different than the youtubers who were telling you. They were telling you back in July and August, it's the bull run. Deep, deep, deep. And then you watched your stuff crap. Right? They were telling you for months, it's the bull run. Deep, deep. We're here all coincidence. Deep, deep. They were telling you all that for months. And none of that was true. Was not true. So welcome, by the way, and you're hearing me, and feel free to join our discord if you'd like, or on our social media. You're going to hear what I said multiple times over, that we were not at the bull run yet. And I kept saying 2024. And I've been saying 2024 for the longest time, but it was obvious to me, and it's possible that I don't even know exactly when 2020 for it will happen, but it's possible that we get more disruption. I expect more volatility. I want to briefly explain why. I know that pretty confidently.
You have to understand that there are people still sitting on various cryptocurrency and they're, quote, wrecked. Right. They're waiting for it to get back to a level so that they can sell out. They can get out of it. They're done. I'm tired of this crypto crap. Screw you guys and going home. Whatever. Right? They're done. They don't want to do it anymore. And so they're waiting to sell. So you're going to have people at various levels waiting to get out of it. I would argue bitcoin is probably at the top of that list, ironically, because we expect that bitcoin is going to go on a major run. Remember, there was not long ago, bitcoin was down to $12,000 and we're up to $40,000. It was always on an upward trend. It's just that it was not the kind of upward people expected. It was always trending upward. So we were already headed that direction. It just wasn't a bull run. We didn't see what I would describe as a bull run market. Absolutely run. No.
This recent crash, I don't think halts that run. It slows it down. Doesn't really halt that run. But you got to understand, there's going to be people, I guarantee, that's sitting at each one of these levels. There's people at like, 45,000, maybe when bitcoin started crapping. Right. They're sitting there waiting to get out of it. 45, I would argue all the way up. 45. 55. 65. There's going to be people waiting to sell out of this stuff.
We know that's to be the case. So I would recommend, expect and anticipate more volatility because there's people waiting to sell. As crazy as it sounds, they're waiting to sell. Now, there's also people waiting to fomo buy. Fomo buy. In a sense, some of these people that may dump out saying, I'm done with this. This is a scam. They're going to see it to go like 78. They're going to be like, oh, crap, and they're going to fomo back in. And then the cycle continues. It's cyclical. It'll happen every single time, and it's roughly every three ish years that we see this kind of thing. So we knew, and I say we. I'm talking more conservative voices. We knew something like this would happen. It was just a matter of time. We just had to let time pass. And once we got past the raw dirt of it, we see the fruits of that labor.
So, bitcoin, a low of 40,600, a high of 42,000. Decent, not great, but still visually on an upward trend.
Ethereum, rather, a low of 21. Six, a high of 22. Four. Again, middling a little bit, but still upward trend. So I'm stressing. I don't think anything's wrong. It may feel like it because a lot of turmoil happened. But again, if you listen to me for a while, I told you it was coming. Volatility is going to be a thing. We're not going to get a steady upward for a long time. If you're expecting it, I would recommend resetting your expectations in that regard, because I think we got a long way to go, and I don't think it's a bad thing.
For today's episode, I'm going to be talking about some more wider economy, not really news, but wider economy information that's brought to attention because I want to round this out as we evolve the [email protected]. I want to make sure it's a rich experience for you. So if you'll bear with me for a moment, this won't take too long. I want to read a snippet of thoughts that comes in opinion piece and it's around. Gary Gensler hedge funds, taxes, regulators and so I think it's a good listen point because what it helps us understand is how this all impacts you as if you're in the United States. That is how it impacts you and your finances. So follow along.
There is no more important financial market than american government debt, and it's growing fast. In the twelve months to October, the Treasury on net issued $2.2 trillion in bills and bonds worth of 8% of GDP to fund America's gaping deficits. Adding to the supply, the Federal Reserve has shrunk its own portfolio of Treasuries by nearly $1 trillion since mid 2022. Foreign demand is flat, meaning the treasury increasingly needs big asset managers and hedge funds to buy its debt.
That's worrying some regulators. Could capricious hedge funds shake the foundation of the global financial system?
One concern is the so called quote basis trade. This is when hedge funds exploit small gaps in price between futures contracts on treasuries, which they sell to asset managers and the bonds themselves, which they buy. Making money this way requires high leverage. So hedge funds borrow from banks posting treasuries as collateral. By one estimate, in December 2022, they owed $553,000,000,000 this way, and the trades were leveraged at a ratio of 56 to one. Stop.
Let me try to simplify what this is implying, and I don't have any evidence to back up what this person is talking about. Let me talk about what it's implying because it affects your cryptocurrency strategy.
Right now, the government likes to print and print and print and print and print to cover its debts.
The debt gets purchased, interest is paid, but the point is the debt gets purchased. What this is saying is that the vast majority of that debt purchase is not actually happening by foreign entities as used to be the case traditionally. Rather it's happening with domestic hedge fund organizations think like a blackrock.
So if that's the case, that means they are essentially in control of the debt and the wealth backing of that debt. But it gets worse, because what this person is implying is that they're basically then turning it around.
And all of these contracts, futures contracts, we talk about futures contracts and essentially gambling, taking leverage. So borrowing of assets and extending so that they can. It's almost like squeezing turnip it. You're bleeding out. You're bleeding out of arbitrage, you're bleeding out of price shifting. You want volatility, because as you can influence longs and shorts through volatility, you're just pocketing, pocketing, pocketing, pocketing, irrespective of whether it goes up or down. And if you can influence price to go steeply down, which is actually what FTX allegedly was doing, because you're controlling it, allegedly, it means you can profit off of it on its way down.
So in order to do this leverage, and we're talking non crypto here, in order to do this leverage, they need more money than they currently have. Well, what do you do? You borrow it. Where do you borrow it? You borrow it from banks. So then think about this. If a bank overextends itself, let's take the whole housing bubble, cris. Right. People using their homes as atms, they're borrowing against the homes like crazy.
The houses are blatantly overpriced, and then everything crashes and the whole bank shut down. Why Kobe shut down, et cetera. Similar situation is potentially possible.
You have these banks who are just lending money, and this is the flaw of the credit system. They're just lending money to these people who really don't. They really don't need it. They're being given it because their credit score is high. Their credit score being high doesn't guarantee they're going to pay the loan back, and in some cases, they can't.
Now, connect this to cryptocurrency, because you have the same type of situation. You have influence of longs and shorts. You have profit off of the arbitrage, off the shifts in price. You have money where you can force the price down and profit off the shorting. You have money where you can trigger FOMo to influence the price to go a certain direction. You have liquidations, forced liquidations, where you might be able to buy at a steep discount and stack bags so that when it does go up, you can then dump off liquidity. All of these influence points, that's what's being implied here, is contributing to some of the disruption that we see.
And it's important for you to understand in cryptocurrency that what you might be doing if you're a spot trader, as in you just put it in your wallet and be done with it.
You're being influenced whether you don't realize it or not. And you might think, well, I could just put it in stable coins, sure. But as we saw with real USD, Ust and so many other ones, they're not really as stable as they claim. You can't really bank on it. It's almost actually more of a gamble than some of the tokens are at this point. So there's really no safe haven.
And it's important for you to understand, this is the takeaway. It's important for you to understand that just because you have an investment strategy doesn't mean that you're not being influenced by factors outside of your control that sometimes you don't see and do not know and cannot predict.
So you might ask, well, what do I do about it? What I would recommend? And it's only a recommend. I can't tell you what to do.
I know that the Internet has been pushed as the sole source and primary source of information. If you choose to do that, that's great. You can search whatever you want. What I would recommend is you consider subscribing to the Economist. The Economist has a physical magazine. You don't have to do it if you don't want to. They have a physical magazine. They also have an online service.
But I think they give good information that helps you anticipate and at least be thinking about all these different other factors that go into the impacts on fiat, the impacts on crypto, the impacts on your local economy and the impacts on the global economy, and how they all will change your investment strategy. Whether you choose to be bearish because you see something has just happened, or you choose to be bullish because something just happened. Regardless, all of your investments are being, it's almost like puppets on a string.
They're being influenced, all of them. And you just need to understand it, because once you understand it, see that understanding is power. The knowledge that it's happening is power. The awareness of how it generally works is power. You don't need to know all the nuts and bolts. I do recommend that you get a strong understanding about all of the different nuances and how it all interconnects, that you can't just treat it as stock markets over here and crypto is over there. It didn't work that way, brother. Fiat is in the middle. No, they all touch each other. Governments, debt, foreign assets, commodities, all of them interplay, because at the end of the day, it's the same money shifting, moving. We're not seeing new money flow in because although money is being printed, the money being printed is essentially being gambled, too. It's something to really think about. That's my only call to action. Be thinking about it and try to inform yourself because I guarantee once you wrap your head around it and take the time to really think it through, you'll adjust your trade strategy accordingly. You'll realize, okay, that means I can choose to be a gambler, but if I choose to be a gambler, all bets are off. See what I did there?
Let's talk about the exchange.
And I'm going to target Kraken first.
I debated which one to talk about first, but I'm going to talk about Kraken first. The reason I'm talking about Kraken first is because I did a coverage on them back in, I believe it was November 2021, quite a long time ago. They were one of the first ones I did. Did. And I didn't have kind words to say about them back then. The reason I didn't have kind words to say about them back then is because, frankly, there wasn't anything kind to say about them back then because of what I saw at the time. So this is going to talk about what I saw back then and what I see now. And if you'd like to see that episode, cryptotalkradio. Net, go to the search bar. Just type Kraken. You'll get a couple of hits. One of them is blatant in the one I was talking about in November 2021.
But top of the thing, I talked about the KYC. I actually use Kraken now because I was having issues. I had issues with gate IO. They kicked Americans off. So I left gate IO, which whatever one it was that shut down, I think it was Hotmart or hotbit rather. One of the two shut down and then bitmart and then all these other ones. And I had issues with whatever one it was that shut down. Can't remember. And then I started having issues with Kucoin, and I had major issues with Coinbase, and I'll talk about Coinbase. Trust me. Trust and believe that one.
But I went to Kraken and I saw that the interface slightly improved. I wouldn't say greatly improved. It's slightly improved. It's a little bit better. They do the multi factor two factor on an authenticator app, which is fine. And the sign up was reasonably smooth, like I said before.
And the KYC was actually pretty benign. It was painless, it wasn't crazy. They didn't force you to have a mobile phone.
You upload front and back of driver's license and give them a selfie photo so they can compare it. That's all it was. And then they reviewed it, and I can't remember how long it took. It didn't take long. And after that, it's free to go. They don't have, far as I can remember, they didn't have levels of KYC. It was just give us your information in order to do it. And I said last time, you basically can't do anything if you don't do KYC, which is different than Kucoin, which I'll talk about a different episode. You get inside and Kraken has a very basic interface. There's not much to it, but when you dig deeper, you realize there's actually two different levels of trading. They have a straight up spot trade, which is their analog to Coinbase's basic interface. Then they have a pro, and the Pro is analog to Coinbase's pro interface, the spot interface. You actually can deposit cryptocurrency to it. So I'm under the impression you have to do KYC to do the deposit.
I don't know how I feel about that, because, again, we're not dealing with fiat. So to me, KYC shouldn't apply. In any event, you can do deposits. When you do deposits, they generate deposit addresses for you. So it's basically a hot wallet. And all that means for you is that your address that's generated is specific to you and your deposits. There's likely certain cryptos that require a memo, but the point is you generate them for your account.
You can also do the withdrawals as well. And the interesting thing about the way they do withdrawals, because it's different than others. I'm used to every withdrawal you have to go in and you have to tell it, I'm withdrawing this specific type of asset that's different than like, Kucoin, where as long as it's the same network, for the most part, they leave you alone. In this one, you have to actually create and you put it in, but you have to create an actual withdrawal address inside. So you give it. Here's the address I want you to send it to, which can be whichever one that supports that chain. They then make you do a two factor. So you have to enter a code from your app to approve it. And via email, there's a verification step. So you get a button in the email, you click it, and then it's good to go. You only have to do that the first time, but you have to do it per asset. And I thought that was interesting.
It's not bad. Just was interesting to see that. So you can withdraw, you can deposit. They have cash deposit options. I'm not a fan of doing it from Kraken.
There's two ways to do it. You can send money to them. So you can do the ach, you can do the wire, you can do the credit card, or you can do a pull, and the pull would be them. The pull is where I have an issue, and I'll talk about that in a second.
The wire, I thought was pretty smooth, but it takes them a while to actually credit the funds. I would say probably about 15 to 30 minutes to credit, which is kind of weird. I understand why. It's because when you deposit, it's actually going into a central account, a single account, and then there's a code that goes from your bank to find it. And so that means there's got to be humans in the mix that have to find it and put it there. And I wish they would fix that to where it's automatic. It goes in, shows up in a couple of minutes. Wires are pretty much instant at this point, so I wish they'd fix that. Ach. I did not bother, because if you're going to do ach, and that's fine, but then you're waiting 24 hours, assuming it's a business day, I didn't want to wait. I might as well do wires. I do get charged wires from my primary bank. I don't from my secondary bank. So if I really needed it, I make enough money. I don't care. But if it bothered me, just know my bank charges wires. Your bank might as well. Otherwise you have to do ach and you have to wait. Or you can do the credit card, and then Kraken charges a fee for the privilege of using your card, which pisses me off.
Then the pull on Kraken. So Kraken uses plaid. Plaid is a service. It's a fintech service. And what it does is it allows you to connect your bank electronically so they can verify balances and amounts.
The problem is that despite the fact that they connect plaid, and despite the fact it gives them access to the balances, and despite the fact that plaid technically allows them to debit the account, they still put a hold, seven day hold, on the deposited funds, which is a joke. They basically treat it like a physical check. Well, that's a waste of time, because the whole point of the seven day hold in banking is because you don't know if the funds are in the bank account that you're pulling from. When it's plaid, they have direct connect to the balances. I've talked to the plaid people directly, actually. I know how their inner workings work. They have access to do all that. They don't need the seven days. It's a waste. Now, if you're not in any hurry, then it is what it is. But I wasn't going to do a seven day wait. It's a waste of time. The whole point of trading this stuff is, boom, you're working quick. So I think that's a joke. So basically, every pull, transaction type, credit card, ach, pull is a waste of time. As far as Kraken, it's not exclusive to Kraken. I'm calling them out because they actually encourage you to do that. And don't really tell you that it's this delay until after you do it.
I looked at the pro. I wasn't really impressed. It's not really a user friendly interface, in my personal opinion. I don't think very much of it. It's fine. It's workable, it's powerful. You can do futures trading right, if you want to, and it takes most of the same trades and everything else. And unlike Coinbase, it's one pool of money. So in Coinbase, least last I looked at, and I have more story on that one, with Coinbase, you had to actually transfer. I think they've changed this. You had to actually transfer money from the basic coinbase over to the pro or vice versa. They might have fixed that. If they haven't, it was annoying. Kraken, you don't have to do that. So I'm pulling money. So that's positive what it is.
Summary of this. I don't have any concerns with Kraken other than their recent run in with the SEC. Now, they've been getting attacked by the SEC a lot. I did a video, and this is on that same search result. If you want to check it out, I recommend it. About Gary Gensler. And he had used meat and vegetarian terms, talking about a settlement with Kraken. So SEC went after them late 2022, and then Kraken settled, said, okay, we're settling. Recently, SEC was going at Kraken again, so they won't let him go. So it doesn't really matter if they settle or not. Which is why I was disappointed that they settled this time. They didn't settle. My point is that from what I saw, Kraken seems like a decent exchange. They fixed a lot of stuff. It doesn't require a mobile app. It's actually pretty clean and easy and intuitive.
I argue back then, well, why would you use this versus anything else? I don't want to spend time here explaining more.
Suffice to say, I would recommend Kraken over Coinbase at this point, if you have a choice, if you're one of those gamblers who's going to use VPN to go to one of the other ones, your risk is your risk, and I'll be talking about those exchanges as well. But the fact that Kraken supports regular us people, I don't know if they ban certain states, I didn't see it. They didn't ban Nevada for sure. They haven't banned me so far. I don't know. But I don't know if they banned certain states. That may be something to consider. I can't speak to that. All I'll tell you is that from what I can tell, it seems like a decent exchange if you want to take a look at it. They do restrict access to certain cryptocurrencies, but they'll show you. So in the list, you'll see them there, but they're grayed out, so you can't choose them for trades. Jasmine is a great example. I was looking, I'm like, it says Jasmine is on this dude, and you cannot trade it. You can't trade on the pro, you can't trade it on the regular at all. There's a certain list of those that you cannot trade. But you can trade Monero, you can buy it, you can sell it, you can deposit it, you can trade Monero all you care to.
And you can trade Luna classic, but you can't trade ust so there's specific ones that they will not do. Bone will not. You cannot shib. Yes.
So just be careful.
If you want a variety of tokens, you may find Kraken somewhat limiting.
But if you're looking for some of the common ones, most of the ones that have their own blockchain are pretty well represented. It's going to be the ones that are, like, the ones that can actually make you money. Those are the ones that you're not going to see, with the exception of Luna classic and Shib. So that's my thoughts on Kraken. Again, I'm not taking back what I said before, but I am adjusting it ever slightly that I can see now, now that I've had experience with a lot of these exchanges, Kraken is taking kind of a front seat compared to the rest of them, and it's clear that they've worked hard to try to make the best overall experience and they've kind of been off to the side and have not put themselves out there at significant risk. They are getting attacked by the SEC, and that's something to keep in mind if you do decide to check them out. Kraken.com and definitely check them out. If you're looking for another exchange, I have no reason not to recommend them. If you're looking for a basic exchange, I'm not talking anything crazy advanced or nothing. It's a basic exchange for those that care. They do have nfts and other stuff that you might want to take a look at as well. I don't know if there's anything to those because it didn't seem like there's very much traffic, but it's there if you want to check that out. The last thing I'll say in closing is around bone, and I don't want to spend a lot of time on it. That's why I left it for last. But Bone, Bone has actually did. It's done very well, considering what it is. And what some don't realize is that bone and bitcoin, they are connected in a way. And bitcoin recently going on a dump, somewhat of a dump, not a crazy dump, but somewhat of a dump, affected bone. But it didn't change the fact that bone didn't go all the way down like you might have expected. It lost. Certainly it didn't go all the way back down. Bone has been reasonably stable and bone, for the most part, has the greatest potential that I saw of everyone in the Shib ecosystem. More than Shib, more than leash. But it's a long play. It's one of those where you look at it and you're like, once we get a true bull run, this has no choice but to go crazy ballistic. There are certain other ones that are in the same situation. It's bone I'm looking at because most more than the rest, bone is less likely to be a scale. So I look at it and it's one of those solid investments. It's a solid investment. It's not going to make you a millionaire overnight, but it's one of those solid backing investments, just like the early phases of avalanche and polygon and phantom. And I maintain that and I'll continue saying that.
And I want people to understand once we get to 2024, if you get back to a bitcoin price of 68,000. I think you're going to see and reflect on what Leister told you and saying, you know what? He did see something. There was something there. Everything was about patience, and we had to give it some time instead of just watching it thinking there's something wrong with it. Certainly, Shyoshi is an idiot, but it's also directly connected to bitcoin's moving, and we haven't seen the best of bitcoin come back yet. Until that happens, I don't think we can make a fair assessment about bone success or failure. And I say give us some time, because I think. I think we're in for some rather amazing stuff coming into 2024, certainly beyond. And I'm on board for that ride.
Welcome.
